Warren Urges SEC to Act Quickly to Issue Strong Climate Risk Disclosure Rule
Warren Slams Delays as Unwarranted and Unacceptable, Inconsistent with Chairman Gensler’s Commitment to Develop Rules by End of 2021
“Having the Commissioners litigate against themselves and issue a watered-down proposal is at odds with that responsibility, and I urge you to act quickly and to release the strongest requirements possible to begin the formal rulemaking process.”
Washington, D.C. — United States Senator Elizabeth Warren (D-Mass.) wrote a letter to Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), about the delayed release of the SEC’s proposed climate change disclosure rule, which would require public companies to disclose details about the climate-related risks they face.
Senator Warren has long advocated for the public disclosure of climate-related information, such as the amount of energy companies buy and how they manage risks posed by rising temperatures, to ensure that investors and the public have the necessary information to accurately assess and address environmental and financial threats. In April 2021, Senator Warren reintroduced the Climate Risk Disclosure Act to provide the Commission with a framework to implement stronger guidance on climate change disclosure requirements. However, despite Chairman Gensler’s commitment to develop a mandatory climate risk disclosure rule proposal for the Commission’s consideration by the end of 2021, the process has reportedly been delayed by internal disagreements among the Commissioners, and no draft rules have been published.
“These delays are unwarranted and unacceptable, and violate the commitment, which you made seven months ago…The lack of a rule means that shareholders and investors are left in the dark about the significant long- and short-term climate risks facing public companies, including supply chain disruptions, infrastructure risks, costs from storms, sea-level rise and weather-related crop or equipment failure, and economic or national security instability,” said Senator Warren.
Not only does the SEC have clear authority to issue climate disclosure rules, President Biden has also directed financial regulators to “assess climate-related financial risk to the stability of the federal government and the stability of the U.S. financial system” in the Executive Order on Climate-Related Financial Risks, issued just months after coming into office.
Senator Warren has asked the SEC to respond no later than February 23, 2022, and provide a clear timeline for publication of the climate disclosure rule and the rulemaking process that will follow, a summary of any concerns regarding the agency’s statutory authority to impose a climate disclosure rule, and a staff-level briefing on the rulemaking and implementation process.
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