US non-profit organisation Ceres is attempting to gather support for its response to the Securities and Exchange Commission’s (SEC) consultation on corporate climate change disclosure rules.
Ceres is encouraging investors and companies to endorse its Statement of Essential Principles for SEC Climate Change Disclosure, which aims to establish a strong minimum standard for any climate disclosure rules it issues.
The standardized mandatory disclosure would benefit companies and investors, Ceres said. It argued that companies would be better positioned to protect themselves from future climate risks, while investors would have better information with which to analyze their portfolios.
The non-profit’s statement includes several recommendations for any disclosure rules. Such regulations should be based on recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), Ceres said.
Ceres’ statement also wants rules to include industry-specific metrics that highlight the material climate risks manifest in different industries, and requirements for governance and strategy disclosures to provide insights into companies’ climate risk exposure, strategies and scenario planning.
The SEC rules should be updated regularly in response to climate change impacts, scientific consensus around climate impacts, and capital market responses to climate risks, the statement said.
Steven Rothstein, managing director of Ceres’ Accelerator for Sustainable Capital Markets, said in an email calling for support: “Ceres and our network of investors have been calling for mandatory climate disclosure rules for more than a decade. We successfully petitioned the SEC to issue climate risk disclosure guidance to companies in 2010. Now, we have an opportunity to go even further and require all publicly traded companies to better disclose the risks posed by the climate crisis.”
Since President Joe Biden’s election, the SEC and other regulators have approached environmental, social and governance (ESG) policies far more seriously in comparison to the previous administration.
The Biden-Harris administration also plans to issue an executive order that will include climate risk disclosure requirements. Recently, Apple, Salesforce and HP announced support for mandatory disclosure.
The deadline for responses to the statement is Friday 28 May.