Attorneys General are Attempting to Change the SEC's Climate Disclosure Rules
Following the SEC's (Securities and Exchange Commission) proposed rule on climate-related financial risk disclosures, a group of states led by California Attorney General Rob Bonta submitted comments to the SEC.
In the letter, the AGs state that the new requirements are needed “not only for the protection of our state residents who invest their retirement savings, college funds, and life savings but also for the benefit of states as investors that safeguard the pensions under their control.”
According to the SEC's proposal on April 11, 2022, the current laws on climate-related disclosures for investors would be changed to better serve investors.
The disclosure of financial and material climate risks, greenhouse gas emissions, and other financial metrics would be required by these new rules.
On March 15, 2021, the SEC issued a statement announcing plans to evaluate whether existing disclosure standards adequately equip investors with "consistent, comparable, and reliable information on climate change."
As a result of that statement, a group of 12 AGs led by AG Bonta filed comments in response. When the proposed regulation was announced on June 15, 2022, West Virginia led a group of 24 other states in their opposition to it.
As a result of the lack of climate risk information, investors face a financial risk when they cannot evaluate companies and the dangers of greenwashing. Several new restrictions and restricted compliance dates are also being pushed by the AGs to enhance the rule.
“Climate change is already costing the US economy hundreds of billions of dollars each year, and that figure is only set to grow,” said AG Bonta. “Whether a company takes seriously its financial exposure to climate change may have a serious impact on the value of that company. I urge the SEC to finalise its proposal to require companies across industries to provide accurate, detailed information about their climate change-related risks. This information is critical for investors to make smart decisions about where they are putting their money.”
Source: Environmental Leader