A multistate coalition led by California Attorney General Rob Bonta submitted comments in response to the US Securities and Exchange Commission’s proposed rule on climate-related financial risk disclosures. In the letter, the AGs state that the new requirements are needed “not only for the protection of our state residents who invest their retirement savings, college funds, and life savings, but also for the benefit of states as investors that safeguard the pensions under their control.”
On April 11, 2022, the SEC proposed changes to current rules on climate-related disclosures for investors. These changes would require the disclosure of financial and material climate risks, greenhouse gas emissions, and other financial metrics. Previously, on March 15, 2021, the SEC released a statement announcing plans to evaluate whether its disclosure rules sufficiently equip investors with “consistent, comparable, and reliable information on climate change.” AG Bonta led a coalition of 12 AGs in filing comments in response to that statement. On June 15, 2022, West Virginia led a coalition of 24 states in comments opposing the proposed rule.
The joint comments stress the financial risks that investors face when they lack information about climate risk that would allow them to compare companies and the risks posed by greenwashing to investors. The AGs also push the Commission to strengthen the rule and ensure transparency through several specific additional requirements and tightened compliance dates.
“Climate change is already costing the US economy hundreds of billions of dollars each year, and that figure is only set to grow,” said AG Bonta. “Whether a company takes seriously its financial exposure to climate change may have a serious impact on the value of that company. I urge the SEC to finalize its proposal to require companies across industries to provide accurate, detailed information about their climate change-related risks. This information is critical for investors to make smart decisions about where they are putting their money.”
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