Aug. 9, 2022
August 9, 2022 Dear Countryman: Thank you for the opportunity to comment on the proposed rule for companies to disclose climate-related information to investors. I believe this is a good addition to the current reporting requirements that will ensure investors are receiving all material information needed to make decisions. I appreciate the rules being formed around existing, proven standards like TCFD and GHG Protocol. I believe that consolidating the standards is crucial to reduce the challenges of gathering climate-related data. I request that additional definitions be made on various requirements given in the proposal. Climate-related opportunities can be very subjective, and mean different things to different people. I believe that the reporting of opportunities should be standardized, and defined clearly for organizations. I appreciate that opportunities are made optional, as some organizations are not actively tracking them, but I believe if defined correctly, can help investors see more positive outcomes from organizations work in building more sustainable processes. I also request that the requirements around disclosing scope 3 emissions be defined more clearly, specifically around the materiality. Scope 3 emissions are required to disclose if material, but without clear definitions, I believe many companies will categorize their scope 3 emissions as immaterial if at all possible, as the challenges of collecting that data make it more favorable to skip this reporting requirement. In addition, I believe some leniency is required of organizations needing to report on climate-related risks in such detail. Currently, many public companies assess risks in a very qualitative manner. Asking companies to 1) integrate their climate-risk assessment process with enterprise risk management group, and 2) report in quantitative terms are sometimes in compatible, and very difficult to do, especially with the precision that is being required. I believe conducting scenario analysis and risk assessments on climate-risk drivers is critical, but requiring such detailed impacts on financial statements is extremely difficult for organizations to do, and will require massive investments, as many ERM programs can't provide that detailed information for their existing risks. Thank you again for providing a method to respond to the proposal.