Jun. 11, 2021
Dear Securities and Exchange Chair Gensler,
Thank you for SEC’s invitation to provide public comment on Climate Change Disclosures,
- which rightly identifies the urgent need for
- mandatory climate,
- environmental,
- social, and
- governance (ESG)
disclosures.
Climate change poses potentially catastrophic risks to
- the environment,
- communities, and
- the financial system.
As a result, it is vital for you to require climate-related disclosures
- in order to meet the SEC’s mandate to
- protect investors;
- ensure fair, orderly, and efficient markets; and
- facilitate capital formation.
In particular, the fossil fuel industry and sectors that rely on agro-commodities,
- including the agribusiness and consumer goods sectors,
pose risks to the financial system
- that must be disclosed by companies whose
- direct operations and
- supply chains
are involved in these sectors
- as well the financial institutions
that enable them.
Disclosures must:
1. Be mandatory and standardized
- in a way that makes them comparable across firms and sectors.
2. Be easily
- accessible,
- transparent,
- clear, and
- decision-useful
to all investors across different levels of sophistication.
3. Include both qualitative disclosures, such as
- the information currently reported
- under the voluntary Task Force for Climate
Related Financial Disclosures,
- as well as specific line-item, quantitative disclosures.
4. Be published in annual and quarterly SEC filings, and
- to the extent possible,
should be included in the audited financial statements.
- Include quantitative metrics and qualitative information about
- governance,
- strategy, and
- risk management.
5. Cover both physical risks and transition risks
- that affect enterprise value,
- the impacts that issuers have on society,
- the natural environment,
- the global financial system, and
- investors as a whole,
including risks associated with
- human rights and
- the rights of Indigenous Peoples and
- other vulnerable and marginalized populations.
6. Report on total greenhouse gas emissions (Scopes 1, 2, and 3)
- linked to their own operations and
- their tier one suppliers.
Include quantitative and qualitative data
- used in scenario analysis in regards
- to scope 3 emissions and
- specifically direct and supply chain emissions
- from land use,
- land use change, and
- forestry.
This data should include detailed data on
- company land banks,
- land and forest management practices,
- sustainability and governance policies, and
- deforestation-reduction targets.
7. Be in a machine-readable format
- to allow academics and other stakeholders
- to easily use this information and
- compare, analyze, and identify
- discrepancies
which could be the basis for shareholder pressure and enforcement action.
Sincerely,
Carolynn Kohout