Jun. 17, 2022
Hello, I would like to provide comments on the proposed rule titled "The Enhancement and Standardization of Climate-Related Disclosures for Investors." I believe the SEC could leverage the Weather, Water, and Climate Enterprise (heretofore referred to as the Enterprise) to assist in the successful implementation of the rule. The challenge of creating “comparable, consistent, and reliable disclosures” was a primary reason cited in Commissioner Hester M. Peirce’s dissenting opinion. The Commissioner writes, “Disclosures on the physical risk side will require companies to select a climate model and adapt it to assess the effects of climate change on the specific physical locations of their operations, as well as on the locations of their suppliers and customers….It will require reliance on third-parties and an array of experts who will employ their own assumptions, speculations, and models. How could the results of such an exercise be reliable, let alone comparable across companies or even consistent over time within the same company?” In my opinion, the Weather, Water, and Climate Enterprise can help address this question. Professional associations such as American Meteorological Society (AMS) and the American Geophysical Union (AGU), partnering with the Task Force on Climate-Related Financial Disclosures (TCFD), the International Sustainability Standards Board (ISSB), national academies, and other risk management organizations could promulgate best practices in climate risk analysis. The TCFD already encourages that companies “facilitate information and experience exchanges among themselves; collectively developing tools, data sets, and methodologies; and working to set standards.” The Enterprise could help reduce this burden on registrants while increasing "comparable, consistent and reliable" disclosures by promulgating best practices for all to use. Furthemore, the Enterprise should continue to promote open data/open science approaches and tools to enhance comparability across registrants. For instance, 30-year regional predictions of essential climate variables, along with authoritative uncertainty estimates, published by the National Oceanic and Atmospheric Administration (NOAA) and other agencies could serve as official guidance for SEC registrants and third-party consultants. This guidance would substantially improve the "consistency, comparability, and reliability" of the climate assumptions going into each disclosure and would align with the Government’s role to provide foundational open data and predictions as a starting point for more refined/local analysis by registrants. Please note that all comments above are my own and do not reflect the views of my employer.