SEC requires companies to disclose information on climate change: NPR
A flare burned up methane and other hydrocarbons as an oil pumpjack was operating in the Permian Basin in Midland, Texas. The combustion of fossil fuels such as coal, oil, and natural gas is the main cause of global warming.
David Goldman/Associated Press
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David Goldman/Associated Press
A flare burned up methane and other hydrocarbons as an oil pumpjack was operating in the Permian Basin in Midland, Texas. The combustion of fossil fuels such as coal, oil, and natural gas is the main cause of global warming.
David Goldman/Associated Press
The Securities and Exchange Commission has issued rules The idea is to force publicly traded companies in the United States to account for their responsibility for climate pollution and explain how they are addressing the threat of global warming.
of Climate change rule adopted by SEC on Wednesday They have been the target of intense lobbying since then. proposed in 2022, interest groups are debating how much information companies should disclose. The rules don’t go as far as environmentalists had hoped. But the U.S. Chamber of Commerce and other business groups filed a lawsuit to block similar regulations Passed in California in 2023, legal experts say the SEC rules are also likely to be challenged in court.
Wall Street’s top regulator said climate change could pose serious financial risks to companies. And since many companies already voluntarily report some climate information, the SEC says it has a responsibility to ensure that the data companies provide is consistent and comparable.
“Our federal securities laws set out a basic agreement: Investors are willing to accept the risks of companies raising money from the public as long as they make what President Franklin Roosevelt called “full and truthful disclosure.” You can decide whether you want to take it or not,” said Gary Gensler, chairman of the commission. the SEC said Wednesday. Gensler added that the SEC has a “key role in overseeing disclosures that are core to the underlying transactions.”
Securities and Exchange Commission Chairman Gary Gensler testifies at a Senate Banking Committee hearing on Capitol Hill in 2023.
Drew Angerer/Getty Images
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Drew Angerer/Getty Images
Securities and Exchange Commission Chairman Gary Gensler testifies at a Senate Banking Committee hearing on Capitol Hill in 2023.
Drew Angerer/Getty Images
Can climate risk reporting help companies reduce greenhouse gas pollution?
The SEC’s new rules will give investors more information about climate risks, but it’s unclear how the regulations will affect global warming.
the study Published in 2023 We found that requiring companies to disclose their greenhouse gas emissions can put pressure on companies to reduce climate pollution from customers, employees, and other stakeholders. Many companies have recently published climate change reports and set emissions reduction targets, but independent researchers say that few have published credible plans to meet their targets. He says there is no.
Gensler said the new SEC rules will require companies to: Start uncovering a plan to achieve your goals They are set in relation to climate change.
“The question of whether global climate disclosure will produce the greenhouse gas emissions reductions we need, and whether they will occur quickly enough, is a question,” said Cynthia Williams, a professor at the Indiana University Maurer School of Law. I think it’s still an unresolved issue.” Faculty of Law. “However, this disclosure regime could encourage companies to take climate change governance more seriously.”
Gensler has repeatedly said the agency’s new disclosure rules are financial reporting requirements, not climate change regulations.
A tugboat pushes a barge into the Mississippi River near Greenville, Mississippi, in October 2022. Dropping water levels wreaked havoc on barge traffic, raising ship prices and threatening exports. Scientists say the likelihood of drought in the Northern Hemisphere in 2022 has increased as high temperatures worsen due to climate change.
Scott Olson/Getty Images
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Scott Olson/Getty Images
A tugboat pushes a barge into the Mississippi River near Greenville, Mississippi, in October 2022. Dropping water levels wreaked havoc on barge traffic, raising ship prices and threatening exports. Scientists say the likelihood of drought in the Northern Hemisphere in 2022 has increased as high temperatures worsen due to climate change.
Scott Olson/Getty Images
Environmental groups and some investors wanted more added.
Under the SEC’s new rules, companies that sell stock to the public must disclose the material risks they face related to climate change and explain how they manage those risks. Companies also need to identify the costs of severe weather. Large publicly traded companies will also be required to disclose significant greenhouse gas emissions from business operations such as factories, offices, and company cars, as well as climate pollution from sources such as the power plants that power their facilities. .
The term material refers to information such as: A smart investor would think that’s important. Learn about the company.
Companies must have their emissions verified by a third party.
“Investors will be able to see more clearly which companies have potential,” said Indiana University’s Williams. “The SEC regulates to meet investor demand, and investors, especially institutional investors, have been asking for this information for at least a decade, and probably longer.”
But Hester Peirce, an SEC commissioner appointed by former President Donald Trump, warned that the new disclosure rules amount to “spamming” information to investors.
“The resulting flood of climate-related disclosures will not only overwhelm investors, but also leave them uninformed,” Peirce said. stated in prepared comments.
But the rule hasn’t gone as far as its promoters had hoped. Environmentalists and some investor groups also called for regulators to force companies to reveal how much climate pollution comes from their supply chains, investments and customers who use their products. For many companies, so-called Scope 3 emissions account for most of their total carbon footprint.
Industry groups argued that there is currently no good way to accurately measure these emissions. Despite these concerns, California is now requiring public and private companies operating in the state and generating more than $1 billion in annual revenue to report all greenhouse gas pollution, including indirect Scope 3 emissions. It didn’t stop me from obliging.
” [SEC] “The rules are a step in the right direction,” said Kathy Fallon, land and climate director for the environmental group Clean Air Task Force. Obtain information that the seller wants to share with you or that they think is relevant to you. ”
other governments Has established or is implementing its own climate disclosure rules? For corporations european union, the United Kingdom, Brazil, Mexico, Hong Kong, and Japan. Additionally, bills are being considered in New York, Illinois, and Washington states that would require companies to disclose information about climate change.
Gensler said it’s important for the U.S. to have its own standards “based on U.S. law, based on the economics of the U.S. market, and based on what U.S. investors use to make investment decisions.” .
He added that the rules adopted by the SEC “will strengthen the disclosures that investors have relied on when making investment decisions.”
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A flare burned up methane and other hydrocarbons as an oil pumpjack was operating in the Permian Basin in Midland, Texas. The combustion of fossil fuels such as coal, oil, and natural gas is the main cause of global warming.
David Goldman/Associated Press
hide caption
toggle caption
David Goldman/Associated Press
A flare burned up methane and other hydrocarbons as an oil pumpjack was operating in the Permian Basin in Midland, Texas. The combustion of fossil fuels such as coal, oil, and natural gas is the main cause of global warming.
David Goldman/Associated Press
The Securities and Exchange Commission has issued rules The idea is to force publicly traded companies in the United States to account for their responsibility for climate pollution and explain how they are addressing the threat of global warming. of Climate change rule adopted by SEC on Wednesday They have been the target of intense lobbying since then. proposed in 2022, interest groups are debating how much information companies should disclose. The rules don’t go as far as environmentalists had hoped. But the U.S. Chamber of Commerce and other business groups filed a lawsuit to block similar regulations Passed in California in 2023, legal experts say the SEC rules are also likely to be challenged in court.
Wall Street’s top regulator said climate change could pose serious financial risks to companies. And since many companies already voluntarily report some climate information, the SEC says it has a responsibility to ensure that the data companies provide is consistent and comparable. “Our federal securities laws set out a basic agreement: Investors are willing to accept the risks of companies raising money from the public as long as they make what President Franklin Roosevelt called “full and truthful disclosure.” You can decide whether you want to take it or not,” said Gary Gensler, chairman of the commission. the SEC said Wednesday. Gensler added that the SEC has a “key role in overseeing disclosures that are core to the underlying transactions.”
Securities and Exchange Commission Chairman Gary Gensler testifies at a Senate Banking Committee hearing on Capitol Hill in 2023.
Drew Angerer/Getty Images
hide caption
toggle caption
Drew Angerer/Getty Images
Securities and Exchange Commission Chairman Gary Gensler testifies at a Senate Banking Committee hearing on Capitol Hill in 2023.
Drew Angerer/Getty Images
Can climate risk reporting help companies reduce greenhouse gas pollution? The SEC’s new rules will give investors more information about climate risks, but it’s unclear how the regulations will affect global warming. the study Published in 2023 We found that requiring companies to disclose their greenhouse gas emissions can put pressure on companies to reduce climate pollution from customers, employees, and other stakeholders. Many companies have recently published climate change reports and set emissions reduction targets, but independent researchers say that few have published credible plans to meet their targets. He says there is no.
Gensler said the new SEC rules will require companies to: Start uncovering a plan to achieve your goals They are set in relation to climate change. “The question of whether global climate disclosure will produce the greenhouse gas emissions reductions we need, and whether they will occur quickly enough, is a question,” said Cynthia Williams, a professor at the Indiana University Maurer School of Law. I think it’s still an unresolved issue.” Faculty of Law. “However, this disclosure regime could encourage companies to take climate change governance more seriously.” Gensler has repeatedly said the agency’s new disclosure rules are financial reporting requirements, not climate change regulations.
A tugboat pushes a barge into the Mississippi River near Greenville, Mississippi, in October 2022. Dropping water levels wreaked havoc on barge traffic, raising ship prices and threatening exports. Scientists say the likelihood of drought in the Northern Hemisphere in 2022 has increased as high temperatures worsen due to climate change.
Scott Olson/Getty Images
hide caption
toggle caption
Scott Olson/Getty Images
A tugboat pushes a barge into the Mississippi River near Greenville, Mississippi, in October 2022. Dropping water levels wreaked havoc on barge traffic, raising ship prices and threatening exports. Scientists say the likelihood of drought in the Northern Hemisphere in 2022 has increased as high temperatures worsen due to climate change.
Scott Olson/Getty Images
Environmental groups and some investors wanted more added. Under the SEC’s new rules, companies that sell stock to the public must disclose the material risks they face related to climate change and explain how they manage those risks. Companies also need to identify the costs of severe weather. Large publicly traded companies will also be required to disclose significant greenhouse gas emissions from business operations such as factories, offices, and company cars, as well as climate pollution from sources such as the power plants that power their facilities. . The term material refers to information such as: A smart investor would think that’s important. Learn about the company. Companies must have their emissions verified by a third party. “Investors will be able to see more clearly which companies have potential,” said Indiana University’s Williams. “The SEC regulates to meet investor demand, and investors, especially institutional investors, have been asking for this information for at least a decade, and probably longer.” But Hester Peirce, an SEC commissioner appointed by former President Donald Trump, warned that the new disclosure rules amount to “spamming” information to investors. “The resulting flood of climate-related disclosures will not only overwhelm investors, but also leave them uninformed,” Peirce said. stated in prepared comments.
But the rule hasn’t gone as far as its promoters had hoped. Environmentalists and some investor groups also called for regulators to force companies to reveal how much climate pollution comes from their supply chains, investments and customers who use their products. For many companies, so-called Scope 3 emissions account for most of their total carbon footprint. Industry groups argued that there is currently no good way to accurately measure these emissions. Despite these concerns, California is now requiring public and private companies operating in the state and generating more than $1 billion in annual revenue to report all greenhouse gas pollution, including indirect Scope 3 emissions. It didn’t stop me from obliging. ” [SEC] “The rules are a step in the right direction,” said Kathy Fallon, land and climate director for the environmental group Clean Air Task Force. Obtain information that the seller wants to share with you or that they think is relevant to you. ” other governments Has established or is implementing its own climate disclosure rules? For corporations european union, the United Kingdom, Brazil, Mexico, Hong Kong, and Japan. Additionally, bills are being considered in New York, Illinois, and Washington states that would require companies to disclose information about climate change. Gensler said it’s important for the U.S. to have its own standards “based on U.S. law, based on the economics of the U.S. market, and based on what U.S. investors use to make investment decisions.” . He added that the rules adopted by the SEC “will strengthen the disclosures that investors have relied on when making investment decisions.”
https://npr.org/2024/03/06/1235943839/sec-climate-change-companies-risk-disclosure-rule-greenhouse-gas-emissions SEC requires companies to disclose information on climate change: NPR
