May. 20, 2022
As a member of Elders Climate Action (https://www.eldersclimateaction.org/), I am committed to a non-partisan effort to end the Climate Crisis and build a just and sustainable future for our children, our grandchildren, and all life. I am grateful that with this proposed rule, the SEC recognizes that we are in a Climate Crisis, and the investors in the components of the financial industry that you oversee need must be made aware of the potential consequences of this crisis on companies and the degree to which these companies are contributing to it. Therefore, I support the proposed rule. It is important that all the disclosures you list be included in the final rule. Please do not let anybody persuade you that these measures are too difficult to define or implement. Each of them are too important not to implement. • The oversight and governance of climate-related risks by the registrant’s board and management. This rule is important for investors. As an investor, I want to be assured that a firm's top management considers climate risks that it faces, and that this task is not just delegated to lower staff. • How any climate-related risks identified by the registrant have had or are likely to have a material impact on its business and consolidated financial statements, which may manifest over the short-, medium-, or long-term. This disclosure is not a paper exercise. Rather, it will force management to consider the real changes it needs to make if its firm wants to survive and thrive in this growing global crisis. • How any identified climate-related risks have affected or are likely to affect the registrant’s strategy, business model, and outlook. This measure is extremely important. What inventories has the company made to assess impacts to date and trends going forward? Unfortunately, the crisis has already been with us for decades, so all firms have plenty of data upon which they can draw. • The registrant’s processes for identifying, assessing, and managing climate-related risks and whether any such processes are integrated into the registrant’s overall risk management system or processes. This measure is one of the most important measures for investors, because if a company has no such processes, I certainly don't want to risk investing in it, nor should any prudent investor. • The impact of climate-related events (severe weather events and other natural conditions as well as physical risks identified by the registrant) and transition activities (including transition risks identified by the registrant) on the line items of a registrant’s consolidated financial statements and related expenditures, and disclosure of financial estimates and assumptions impacted by such climate-related events and transition activities. It is critical for investors to know what climate-related impacts the firm has experienced, and what the company is doing about it. How can investors make investment decisions if a company doesn't know the degree to which severe events have affected its operations? • Scopes 1 and 2 GHG emissions metrics, separately disclosed, expressed both by disaggregated constituent greenhouse gases and in the aggregate, and in absolute and intensity terms. If the SEC preserves nothing else in the final rule, this is the most important. Investors need to know which companies are contributing to this crisis, and which ones are reducing their contributions. • Scope 3 GHG emissions and intensity, if material, or if the registrant has set a GHG emissions reduction target or goal that includes its Scope 3 emissions. Please do not give in to commenters who say estimating these targets are too difficult. Standard practices have been developed and implemented internationally, and the US needs to participate. Furthermore, without this rule, investors don't have any way of understanding, for example, the supply chain problems that can arise from suppliers being impacted by carbon restrictions. • The registrant’s climate-related targets or goals, and transition plan, if any. Along with the Scope 1 and 2 GHG emission disclosures, this measure is supremely important. If a company has no targets or goals or transition plan, how can it be prepared to deal with the future? How can investors feel confident the company can survive climate-related disruptions or increased regulatory restrictions on their operations due to increasing climate concerns? We know these disruptions and restrictions will increase; they are increasing already. How are companies prepared and positioned? When responding to any of the proposed rules’ provisions concerning governance, strategy, and risk management, a registrant may also disclose information concerning any identified climate-related opportunities. This measure is also important. Investors want to invest in companies that will thrive under these impending conditions, not just survive. Nonetheless, the SEC should consider tightening this portion of the rule to ensure that disclosures of opportunities are based on solid evidence, not "greenwashing," Thank you for the opportunity to comment. I hope your actions help reduce the horrible impacts to climate that companies who are registered with the SEC have already caused. I also hope the SEC does not further delay taking steps to guide its registrants toward actions that will investors make more sound choices in the years to come. Richard Burke Elders Climate Action Southern California Chapter