More than 30 members of Congress joined this letter led by House Financial Services Committee Ranking Member Maxine Waters (D-CA) and Senate Banking Subcommittee on Economic Policy Chair Elizabeth Warren (D-MA) to SEC Chair Gary Gensler urging the SEC’s robust enforcement of existing climate disclosure rules and guidance pending the outcome of the litigation challenging its recently adopted final rule and associated stay.
Notably, among other “asks” outside the SEC’s remit, the letter requests the SEC commit to issuing a statement reminding companies that they must comply with non-SEC climate-related disclosure mandates, such as those imposed by California and the EU, as well as the ISSB standards.
Assuming the SEC’s new climate rule survives the litigation at least somewhat intact (see our recent report here: “Lawyers Speak!”), the letter also asks the SEC to commit to providing guidance to companies on what constitutes material information and making materiality determinations, as well as a host of other commitments, as follows:
To better understand what actions the Commission plans on taking to protect investors and implement the new climate risk disclosure rule, we ask that you answer the following questions no later than June 18, 2024:
1. While the final rule is stayed and pending judicial review, will the SEC:
· Commit to enforcing the Commission’s existing climate-related rules and guidance?
· Commit to releasing a statement to remind registrants that covered U.S. companies that are subject to alternative climate reporting regimes, such as those in California or the EU or those promulgated by the ISSB, must comply with those reporting regimes?
· Commit to releasing a statement to registrants that are already disclosing Scopes 1, 2 and 3 greenhouse gas emissions that they should continue disclosing this information?
· Commit to sparing no resources to defend the rule in court?
2. Upon the rule being upheld in court, will the SEC:
· Provide guidance to registrants on what constitutes “material” information, and how to conduct and disclose materiality assessments, under the climate risk disclosure rule?
· Recognize alternative climate reporting regimes such as those in California or the EU or those promulgated by the ISSB to provide registrants with more options to satisfy compliance with the rule, as well as the factors the Commission will consider as it makes this determination?
· Detail the enforcement and implementation resources it will devote to the rule?
· Detail its plan to prepare and train staff to implement and enforce the rule?