June 4, 2021
The enclosed responses represent comments submitted by Decatur Capital Management, Inc. to the Securities and Exchange Commission (SEC) on climate related financial disclosures.
Response to Question #1
The Commission should require listed companies to report emissions, and its transition to a low carbon economy material impact in the required annual report.
Response to Question #2
The information concerning climate risk can best be quantified by reporting carbon emissions scope 1 and scope 2 in accordance with the Task Force on Climate Related Financial Disclosures.
Response to Question #3
The Commission should establish a minimum standard to insure consistency of reporting.
Response to Question #4
The reporting standards should follow globally accepted standards such as Global Reporting Initiative (GRI) and / or Sustainability Accounting Standard Board (SASB).
Response to Question #5
We recommend that the Commission should incorporate the framework developed by the joint efforts of the Global Reporting Initiative (GRI) and the Sustainability Accounting Standard Board (SASB).
Response to Question #6
We recommend that the disclosure requirements be updated, improved or augmented by the globally collaboration determined by the Commission.
Response to Question #7
Decatur believes that climate related disclosures should be incorporated into existing rules.
Response to Question #8
Decatur recommends that registrants disclose their internal governance and oversight of climate-related issues. Decatur does not recommend that the Commissions require disclosures concerning the connection between executive or employee compensation and climate change risks and impacts.
Response to Question #9
Decatur recommends that a single set of global standards applicable to companies around the world, including registrants under the Commissions rules.
Response to Question #10
Yes, the Commission should require an audit or assurance process that includes the climate related disclosures.
Response to Question #11
No, the Commission should not require a separate certification by a corporate officer relating to climate disclosures. The certification for the current required reporting should cover climate disclosures
Response to Question #12
The advantage of a comply or explain framework will provide the opportunity for companies to report to the level that is appropriate to the company and provide material information to the investors on the compliance commitment of the company.
Response to Question #13
The Commission should require that registrant report sustainability disclosure and analysis section that is material to the listed company and include in the current Managements Discussion and Analysis of Financial Condition and Results of Operations.
Response to Question #14
Climate-related disclosure by private companies varies. Due to the nature of private companies (limited investors, generally smaller in size, less impactful, flexibility due to limited government involvement), DCM would not support the Commission creating climate-disclosure rules for those entities.
Response to Question #15
Yes, Decatur believes that the climate related requirements be one component of a broader ESG disclosure framework. The Commission should focus on the broader ESG disclosures that are material to the listed companies.
If you have any additional questions, please contact me at 404 270 9838 or email at dwright@decaturcapital.com.