Jul. 20, 2026
Paul S. Atkins Chair, U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 RE: File Number S7-2026-19; Comments on RIN 3235-AN76: Rescission of Climate-Related Disclosure Rules Dear Mr. Atkins, et al.: As an investor, it is key that companies disclose climate risks related to company activities, assets, and products through statements and annual reports. Without accurate information about investment risks and actions companies will be taking to mitigate those risks, investors can not make informed decisions about where and how to invest their resources. Extreme heat and drought are already starting to strain utilities ability to produce enough power to meet air conditioning demands while their ability to generate electricity via hydropower are decreasing. This year extremely low levels of water in the Colorado River are likely to disrupt hydropower needed to power major metropolitan areas of the Southwest such as Las Vegas, Phoenix and Southern California. This will mean both significantly less water and electricity generation which will have ripple effects through many businesses in the region. Providing climate-related information to investors about how utilities and other businesses will be investing in resilience to these changes which will/are impacting their infrastructure and/or operations will allow investors to make informed investment decisions. Rescission of the climate-related disclosure rule will instead lead to doubt about the companies' abilities to become resilient and act appropriately with the least impact of these impending physical changes. Without assurances, investors will become more cautious and may move investments to companies who fully disclose, or move their money to other countries who have transparent disclosure measures in places. Based on my research from trusted sources, undoing this rule would lead to: 1. Rescinding the climate disclosure rule would undo many years of work Adopted in March 2024 after a two-year delay, the “Enhancement and Standardization of Climate-Related Disclosures for Investors” rule required publicly traded companies to disclose: Material climate-related risks. What they were doing to mitigate or adapt to these risks. How their board of directors was managing these risks. Any climate-related targets or goals material to their business. 2. Investors have long sought consistent and comparable climate risk disclosure In abandoning the climate-risk disclosure rule, the SEC is responding not to what voters and investors want, but to what donors and powerful corporate interests want. Climate disclosure is widely popular among investors and voters alike. A 2024 poll by Morning Consult found 63% of all voters, including half of Republicans, supported the climate risk disclosure rule because it would hold companies accountable for their environmental impacts and provide greater transparency for investment decisions. Another poll by Data for Progress found 66% of all voters, including 55% of Republicans, supported requiring some businesses to include information about potential climate-related risks in their financial reporting statements. An even larger share of investors supports the climate-risk disclosure rule. Investors have been seeking corporate disclosure of material climate risks since 2003. Investors petitioned the SEC to issue such rules several times, culminating in the first proposed rule in 2022. A Ceres analysis of hundreds of institutional investor comments on the rule found almost universal support: 97% supported requiring climate disclosures in corporate annual reports to the SEC. 100% supported aligning required disclosures with the recommendations of the global Task Force on Climate-related Financial Disclosures (TCFD). 99% supported disclosure of Scope 1 and Scope 2 emissions. 97% supported requiring disclosure of Scope 3 emissions, emissions from the supply chain or customer use, if material or if there is a target. 98% supported requiring government disclosures related to board and management oversight. 3. The rationale for rescinding the rule misinterprets both history and law In its proposal to rescind the climate-risk disclosure rule, the SEC claims that the rule: Was a “dramatic overreach” of its statutory authority. Is inconsistent with a materiality-based approach to disclosure. Strays beyond the policy concerns of federal securities law. Imposes costs not justified by benefits. Does not facilitate capital formation. Yet history, the law, and common sense belie these claims. Corporate financial disclosures are essential to the SEC’s mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. The SEC was established to restore investor confidence and regulate the stock market after the 1929 crash triggered the Great Depression — and disclosures are how they do that. The 1934 law establishing the SEC used the concept of “materiality” to determine what facts must be included in company disclosures. The definition was loose, citing “matters as to which an average prudent investor ought reasonably to be informed before purchasing the security registered.” The1976 Supreme Court case TSC Industries v. Northway defined a fact as material if “there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote,” or “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” Key to this definition is not what the corporation thinks is material. It's what investors think is material — and clearly investors think climate-related financial risk is material. The climate-risk disclosure rule asks corporations to report on two types of risk: Physical risks, related to the physical impacts of climate change and extreme weather Transition risks, related to a potential transition to a low-carbon economy. Common sense understands that both types of risk are material factors that could determine whether or not an investor decides to buy or sell a company’s stock. Physical risk includes fires and hailstorms that insurance companies are asked to pay for; supply chain disruptions that trigger inflation; or droughts and floods that make it harder to grow food. Transition risks show which companies are moving forward with climate adaptation and mitigation — and which may be saddled with billions of dollars in stranded fossil-fuel assets as the world moves to a clean energy economy. Further, the SEC’s current claims against climate disclosure could apply to other types of disclosure as well, incapacitating the agency's ability to require any corporate disclosures and undermining its key mission. Congress granted the SEC the authority to require corporate disclosure to inform investors about financial risk. This proposal threatens the entire disclosure program the SEC has successfully overseen for decades. For all of these reasons, I urge the SEC not to rescind the climate risk disclosure rule. All investors want to be informed so they can make appropriate investment decisions. Sincerely, S.E.W. Investor