March 21 (UPI) — The Securities and Exchange Commission is expected to announce a proposal Monday that would require publicly traded companies to release information to investors about their impact on the climate.
SEC Chair Gary Gensler said last year that the commission would use its authority to require disclosures about emissions and efforts to manage climate change risk. Environmental groups and some investors have called for such disclosures to take place.
Gensler said the SEC’s interest in ordering companies to disclose such information dates back to the Great Depression when the agency responded to investors who wanted to know more about a company’s financial status before investing and then information about the CEO and their financial officers.
“Today, investors increasingly want to understand the climate risk of companies whose stock they own or might buy,” Gensler said in a video released earlier this month.
“A lot of companies are already providing such information about climate risk but investors representing tens of trillions of dollars are looking for more consistent and comparable information so they can make informed decisions about where to put their money.”
Some large investors, like multinational assets manager Black Rock already require suitors to disclose such information. In April, Britain will require such information to be made available to investors and European Union already has similar rules in place.
The SEC last took a stab at establishing such rules in 2010 under the Barack Obama administration and came up with guidelines encouraging but not forcing companies to make climate disclosure available. It also did not make those disclosures standardized to make side-by-side comparisons easier.
Some companies are expected to take legal action if the SEC moves forward with the requirement, where they will likely argue they are not in control of emissions throughout their supply chain.