Chair Castor Praises SEC Move to Protect Investors From Climate-Related Risks

WASHINGTON - Chair Kathy Castor of the House Select Committee on the Climate Crisis released the following statement on Monday, after the Securities and Exchange Commission (SEC) proposed amendments to its rules in order to enhance and standardize registrants’ climate-related disclosures for investors:

“Climate risks and harms are growing across our communities with threats to our economy. Investors, pension fund managers and the public need better information about the physical and transition-related risks that climate change poses to hard-earned investments,” said Chair Castor. “That’s why our Climate Crisis Action Plan recommended updating climate disclosure rules to ensure transparency about companies’ greenhouse gas emissions, and to give investors a better picture of the risks that climate change and extreme weather could pose to the companies in which they invest.

“Today’s decision by the SEC to update its climate disclosure rules is the right step forward to design rules that protect investors from harm and ensure the efficient flow of capital. I applaud the SEC Chairman and Commissioners for responding to the urgent call for action from investors and business leaders alike, and for working to provide better access to consistent, reliable, and comparable disclosures of climate-related risks on investments in publicly-traded companies.”

Additionally, Rep. Sean Casten, lead House sponsor of the Climate Risk Disclosure Act, released the following statement:

“Markets are an indispensable tool that we must leverage in order to make the transition from fossil fuels to cleaner energy at the pace scientifically necessary to prevent climate catastrophe," said Rep. Casten. "But for markets to work efficiently, investors need transparency. That’s why I was proud to introduce the Climate Risk Disclosure Act with Senator Warren, prompting the SEC to initiate a rulemaking process to require publicly traded companies to disclose climate-related risks—empowering investors to make smarter decisions and harnessing the power of the free market to help us win the race against the climate crisis before it’s too late. I urge the SEC to thoroughly evaluate feedback on the proposal issued today to ensure the strongest possible final rule.”

Background:

• In 2010, the SEC issued "Guidance Regarding Disclosure Related to Climate Change" to assist publicly listed companies in evaluating when climate change risks require disclosure.
• A 2020 report by the Commodity Futures Trading Commission found that climate change could pose systemic risks to the U.S. financial system and concluded that the 2010 SEC guidance has not resulted in high-quality disclosure of climate change risks across U.S. publicly listed firms, and that it should be updated in light of global advancements over the preceding 10 years.
• In March 2021, the SEC Division of Examinations announced its 2021 examination priorities, which included an increased focus on climate-related risks and the consistency and adequacy of the disclosures. In the same month, Acting SEC Chair Allison Herren Lee requested public input from investors, registrants, and other market participants on ways climate disclosure rules could be enhanced, including by providing more consistent information for investors and clarity for registrants.

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