SEC’s comment period for climate disclosures rule ends today

The public comment period for the Securities and Exchange Commission’s proposed climate disclosures rule ends today. U.S. PIRG submitted a comment letter supporting the proposal and made recommendations to strengthen it.

The proposed rule would require publicly traded companies to improve and standardize the information they disclose about their greenhouse gas emissions.

As our letter explains, the climate disclosure rule is particularly important because Americans’ retirement accounts and other savings could be endangered if we don’t acknowledge potential threats caused by climate change and work diligently to address them.

More from our letter on why investors need the climate disclosures rule:

“Without climate risk and greenhouse gas emissions disclosures, people contributing to their Individual Retirement Accounts (IRA’s) may be unaware of how much individual companies are vulnerable to the physical, transitional, and systemic financial risks caused by climate change, or the extent to which each company contributes to global warming, thereby creating risk to other issuers.”

Recommendations from our letter for strengthening the rule to provide maximum protection for investors:

• In addition to the disclosure of direct emissions in Scope 1 and indirect emissions in Scope 2, all public companies should also be required to disclose their Scope 3 value-chain emissions. It’s critical information for assessing climate risk, as they can represent the majority of companies’ carbon footprints, and the tools to do so are rapidly becoming available.
• While the Task Force on Climate-related Financial Disclosures recommends using at least a 2°C global warming scenario for scenario analysis, we recommend a 1.5°C scenario analysis because of the Intergovernmental Panel on Climate Change’s continued warnings of the significant differences in impact and quality of life between 1.5°C and 2°C temperature increases.
• Details about carbon offsets, if purchased by companies, should be disclosed. Such disclosure will help investors identify and deter greenwashing from advertised offsets that may do little to reverse climate change.

Our full letter is available here.