Jun. 14, 2021
Gary Gensler, Chair
SEC Headquarters
100 F Street, NE
Washington, DC 20549
(202) 551-2100
chairmanoffice@sec.gov
Vanessa A. Countryman
Secretary, Securities and Exchange Commission
100 F Street NE
Washington, DC 20549-1090
rule-comments@sec.gov
Re: Strengthen Climate Protections for U.S. Financial System
Dear Chairman and Secretary:
Experts with the brand new Initiative on Climate Risk and Resilience Law
(ICRRL) are calling on the Securities and Exchange Commission to
strengthen protections from the dangers of climate change to our
nation’s financial system and the millions of people who rely on it to
sustain the American economy.
ICRRL is a joint initiative of Columbia Law School’s Sabin Center for
Climate Change Law, Environmental Defense Fund, the Institute for Policy
Integrity at New York University School of Law, and Vanderbilt Law
School. The partnership was formed to drive legal solutions that address
societal and economic risks from climate change and to improve climate
resilience, including in our financial sectors. ICRRL’s work formally
got underway today with the launch of its new website – and with an SEC
filing detailing its recommendations for climate change disclosure for
businesses.
Climate change presents grave risk across the U.S. economy, including to
corporations, their investors, the markets in which they operate, and
the American public at large. Unlike other financial risks, however,
climate risk is not routinely disclosed to the public. The SEC should
adopt an approach that recognizes the importance of discussing climate
risks in financial disclosure forms. Many impacts of climate change can
be quantified and monetized, and should therefore be treated no
differently than other financial risks.
The SEC called for public input about climate change disclosures in
March in an announcement that included 15 questions for consideration.
Today ICRRL filed its response to that request. Among its recommendations:
The Commission should establish mandatory climate risk disclosure
requirements that produce comparable, specific, and decision-useful
information for investors.
The Commission should move quickly to establish these climate risk
disclosure requirements.
Climate risk disclosure and carbon markets are complementary
policies, not substitutes.
The Commission should solicit stakeholder input on standards, but
industry participants should not have the final say.
Industry-specific standards will help ensure that investors receive
sufficiently specific and decision-useful information.
The Commission should dedicate additional resources to enforcement
and subject certain climate risk disclosures to auditing.
ICRRL also recommended adding climate risk line items to financial
statements that would allow investors to know, for instance, the value
of all climate pollution-producing assets owned or managed by a
corporation, the total properties or other assets owned in 100-year
flood zones or wildfire-prone areas, any fines or sanctions for
non-compliance with environmental laws and regulation, and any plans to
reduce climate pollution.
There is widespread demand for climate risk disclosure among investors.
The proliferation of voluntary standards, many of which have already
received considerable buy-in, indicates that the creation of and
compliance with robust climate risk disclosure standards is already
feasible for both regulators and corporations.
Read all of ICRRL’s recommendations in its full filing:
https://protect2.fireeye.com/v1/url?k=de73bbd4-81e882fa-de735f62-86c89b3c9da5-ece0db08e270e82e&q=1&e=40fba412-9731-473c-9414-fbabab460392&u=http%3A%2F%2Fblogs.edf.org%2Fclimate411%2Ffiles%2F2021%2F06%2FSEC_Climate-Risk-Comments_2021.06.14.pdf
Yours sincerely.
Robert E. Rutkowski
cc:
Legislative Correspondence Team
1705 Longworth House Office Building
Washington DC 20515