SEC Chair Reinforces Importance of Mandatory Climate Disclosure Proposal
September 15, 2022 /3BL Media/ - Speaking before the Senate Banking Committee today, U.S. Securities and Exchange Commission Chair Gary Gensler testified that the agency has the legal authority to put forth and enact rules that will protect investors from risks in the market, including the financial risks associated with climate change.
Steven M. Rothstein, Managing Director, Ceres Accelerator for Sustainable Capital Markets at Ceres reacted to the Chair’s testimony:
“The cost of inaction is too great, and the mandatory climate disclosure rule positions investors and companies to reduce their financial risks. We know the cost of doing nothing is severe: last year, the U.S. saw $145 billion in damages from climate-related extreme weather disasters. It is also important to look at the cost—$1.3 million—that investors are currently spending as part of their fiduciary responsibility to address climate risk. As Chair Gensler stressed today, current disclosure methods are “fragmented,” and standardized mandatory disclosure will help bring greater consistency and stability to the market.”
The rule, known as The Enhancement and Standardization of Climate-Related Disclosures for Investors, was released in March 2022.
The hearing couldn’t come at a more critical time. In the first half of 2022 alone, climate-linked extreme weather events caused an estimated $65 billion in losses worldwide. That’s double the losses from the same time period in 2018. And, with rising greenhouse gas emissions and average temperatures continuing, these numbers will continue to grow.
In a Reuters column published yesterday, Ceres President and CEO Mindy S. Lubber calls for the SEC to reach common ground on mandatory climate disclosure and swiftly finalize the rule. It highlights the various reasons the SEC should act quickly, including investors' calls for disclosure mandates and the accelerating risk of climate-related losses. Earlier this week, 532 institutional investors representing $39 trillion in assets issued the most ambitious investor call for government action on the crisis, including a call for mandatory climate disclosure.
For 20 years, Ceres has been mobilizing the investment community to advocate for mandatory corporate climate disclosure. In June, Ceres submitted public comments underscoring the market’s overwhelming support and demand for consistent and comparable information. Further background is available at www.ceres.org/sec.
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. The Ceres Accelerator for Sustainable Capital Markets is a center of excellence within Ceres that aims to transform the practices and policies that govern capital markets to reduce the worst financial impacts of the climate crisis. It spurs action on climate change as a systemic financial risk—driving the large-scale behavior and systems change needed to achieve a net-zero emissions economy through key financial actors including investors, banks, and insurers. The Ceres Accelerator also works with corporate boards of directors on improving governance of climate change and other sustainability issues. For more information, visit: ceres.org and ceres.org/accelerator and follow: @CeresNews.
Media Contact: Reggie Zimmerman