In his remarks to the House Financial Services Committee at the October 5 SEC oversight hearing (we reported on here), SEC Chair Gary Gensler reportedly signaled a phased-in climate disclosure approach that would take into account company size and the types of disclosure:
Gensler said the SEC is mulling whether to “phase” in its new rules based on company size, “and also amongst the different types of disclosures.” …“I’m really looking for, with the support of my fellow commissioners, to try to put something out to public comment,” Gensler said. The agency is looking at challenges companies face in reporting greenhouse gas emissions or governance and strategies related to climate, Gensler said.
The SEC must ensure that its new climate disclosure regulations don’t hurt the ability of small companies to compete with big ones, Rep. Frank Lucas (R-Okla.) said at the hearing. “Publicly traded companies are at varying stages of climate and ESG disclosure and related reporting, and climate modeling are still an evolving practice,” he said.
In his fireside chat with former SEC Commissioner Robert Jackson, Chair Gensler reportedly reaffirmed his previous remarks to the UN Principles for Responsible Investment that the SEC may look to international standard setters (e.g., TCFD) for “inspiration,” but will promulgate US-specific disclosure requirements.
In our comment letter in response to former SEC Acting Chair Allison Herren Lee’s request for input on climate change disclosure, based on estimated compliance costs and available resources, the Society recommended that any new disclosure mandates for prescriptive, quantitative disclosures be limited to large accelerated filers and have a phase-in period to provide sufficient time for compliance.
See “Biden Presses Climate Agenda on Wall Street” (WSJ); our prior report: “SEC Chair Provides Insight on Climate Disclosure Rulemaking”; and additional information and resources on our Climate Risk & Disclosure page.
This post first appeared in the weekly Society Alert!