SEC will soon require disclosure of greenhouse gas emissions from publicly traded companies

SEC will soon require disclosure of greenhouse gas emissions from publicly traded companies

The Securities and Exchange Commission (SEC) will soon adopt a rule requiring all publicly traded companies to disclose just how much greenhouse gas they emit while doing business, the Washington Post reports. The rule, which is likely to be announced on Monday, will include climate risk disclosure—something that SEC Chair Gary Gensler has previously discussed adopting and that President Biden touted as a goal during his 2020 campaign. For Gensler, the goal of more standardized regulations regarding climate change has been at least months in the making. In a speech last July, Gensler said that investors were clamoring for climate risk regulations in order to make better-informed decisions.

“Investors increasingly want to understand the climate risks of the companies whose stock they own or might buy,” Gensler said before the Principles for Responsible Investment “Climate and Global Financial Markets” Webinar. “Large and small investors, representing literally tens of trillions of dollars, are looking for this information to determine whether to invest, sell, or make a voting decision one way or another.”

Gensler has previously noted that, because the SEC lacked regulations for standardized climate risk disclosure and greenhouse gas emissions, little oversight or consistency existed when it came to publicly traded companies self-reporting. That lack of transparency makes it difficult to truly measure just how companies are contributing to the climate crisis and follows a pattern of companies essentially lying by omission when they do release any climate-related data. The Washington Post cites Tesla’s penchant for only releasing emission information for the Model 3, which accounts for the majority of the cars produced but fails to include emissions data for more than 24,000 additional vehicles, like the Model S and Model X. With the adoption of climate-focused regulations, the U.S. will join the likes of the European Union, the U.K., and Japan looking to adopt climate disclosures for businesses. The SEC regulations are, of course, expected to face pushback.

Related: Sarah Bloom Raskin’s Fed nomination threatened by Joe Manchin’s obsession with fossil fuels

A public comment period is scheduled to take place following the unveiling of the regulations, which are expected to coincide with a public meeting on March 21, as announced by Gensler last week.

Today we announced that @SECGov will meet publicly on March 21 to consider staff proposals to mandate climate-risk disclosures by public companies. Companies and investors alike would benefit from clear rules of the road. Here’s why:

— Gary Gensler (@GaryGensler) March 10, 2022

As The Conversation notes, Republicans eager to challenge even the threat of accountability will likely look towards whether the SEC has the regulatory power to enforce Environmental, Social, and Governance (ESG) factors. A whole group of state attorneys general believe that ESG factors are immaterial to financial information and therefore not something the SEC should be able to regulate. A public comment made by West Virginia Attorney General Patrick Morrisey specifically takes issue with the SEC delving into climate change as an issue. “We urge the Commission to remain focused on its historic mission and role rather than seeking to expand its congressional mandate into unrelated social matters—particularly where companies are showing themselves adept to provide the type of information that customers and investors actually demand in this area,” Morrisey said.

This tracks with Sen. Joe Manchin of West Virginia’s recent decision to not support Sarah Bloom Raskin’s Fed nomination, citing concerns over her climate change beliefs. It’s a frequent Republican talking point to stay “nonpartisan” on issues concerning the climate crisis, even though there is nothing inherently biased about the very real fact that climate change is threatening the planet. Being that the GOP bills itself as pro-business, perhaps Republicans should actually listen to the companies and executives they attempt to court. According to a Deloitte report from 2021, more than 80% of the 750 executives the consulting company polled are concerned about climate change.

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