Commissioner and then Acting Securities and Exchange Commission Chair AllisonHerren Lee issued a public statement inMarch asking investors, SEC-registeredcompanies, and other market participants for input on the agency’s reviewof corporate disclosure requirementsconcerning climate change.
Lee asked respondents to consider 15
• How can the commission best regu-
late climate change disclosures to pro-
vide more consistent, comparable, and
reliable information for investors, while
also providing greater clarity to compa-
nies on what is expected of them?
• Should disclosures be included inannual reports, other periodic filings, orotherwise be furnished?
• What information related to climaterisks can be quantified and measured?
• What are the advantages and disadvantages of rules that draw on existingframeworks, such as those developedby the Task Force on Climate-RelatedFinancial Disclosures, the SustainabilityAccounting Standards Board, or theClimate Disclosure Standards Board?
She encouraged commenters to submit empirical data and other information in support of their comments.
In Febuary, she directed staff to reviewcompanies’ compliance with the agency’s2010 disclosure guidance for climatechange as a first step in developing a morecomprehensive framework for climate-related disclosures.
In early March, the agency announced
the creation of a Climate and ESG Task
Force in its Division of Enforcement that
will initially focus on any material gaps
or misstatements in issuers’ disclosure
of climate risks under current rules. The
agency also announced that climate-
related risks will be among the priorities
of its Division of Examinations for 2021.
In a March speech, Lee said the agency should consider “the broader array ofESG disclosure issues” beyond climatechange, including disclosure of specificmetrics on workforce diversity and political spending.
“Research shows that many companiesthat have made carbon-neutral pledges,or otherwise stated they support climate-friendly initiatives, have donated substantial sums to candidates with climatevoting records inconsistent with suchassertions,” said Lee. “Political spendingdisclosure is key to any discussion of sustainability.” She noted, however, that theSEC is barred from finalizing a rule aboutcorporations’ political spending by the2021 Consolidated Appropriations Actthat Congress passed in December 2020.
SHAREHOLDER PROPOSAL RULES
Lee also said she has asked the SEC
She said the agency was currently
working toward “enhanced transparency
around proxy voting,” but should also con-
sider additional steps such as ESG-specific
policy and procedure requirements.
Lee noted the SEC is “committed to
close regulatory cooperation” on climate
risk and ESG issues domestically and
internationally “because the risks and
opportunities related to climate and ESG
cut across all manner of boundaries.”
How the SEC ultimately decides to
change its regulations on ESG and cli-
mate-related issues depends largely on the
positions that Gary Gensler, the expected
incoming chairman, whose nomination was
to be voted on by the Senate in April.
Bernice Napach can be reached at
By Bernice Napach
The SEC Wants Your Input on Climate
Change Disclosure Rules
“Climate and ESG are front and center for the SEC,” says agency
commissioner Allison Herren Lee.