Senator Markey Urges SEC To Mandate Public Companies To Disclose Scope of Climate-Related Risk

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In full transparency, the following is a media release from Sen. Ed Markey, who was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. He is a Democrat. (stock photo)

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WASHINGTON DC – The Senate Climate Change Task Force, chaired by Senator Edward J. Markey (D-Mass), today held a public discussion with leading climate finance experts on the importance of climate-related risk disclosures and their role in protecting investors and ensuring stable markets. As recent extreme heat and flash flooding events place Americans – and their investments – in harm’s way, it’s critical that investors understand the risks associated with companies’ emissions as well as their failure to prepare for the impacts of the climate crisis or transition to cleaner and more stable energy.

Senate Climate Change Task Force members in attendance included Senators Tom Carper (D-Del.), Chair of the Senate Environment and Public Works Committee, Sheldon Whitehouse (D-R.I.), and Sherrod Brown (D-Ohio).

During the discussion, Senator Markey spoke with experts who made the case that the Securities and Exchange Commission’s (SEC) proposed rule on climate-related risk disclosures is within the Commission’s mandate “to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.” Senator Markey also outlined the history and details of the proposed rule, as well as the ways it could be further strengthened to ensure investors can access critical information regarding enhanced climate-related risks when making their investment decisions.


“Communities throughout the United States are facing deadly wildfires, floods, and droughts, all of which have become more frequent with the onset of climate change. But it’s not just communities that face risks from climate catastrophes,” said Senator Markey. “Our economy and our financial system are massively exposed to threats and shocks from climate change—putting livelihoods on the line along with the lives at risk. Climate change will potentially expose publicly traded corporations to billions in climate damages and liabilities, meaning those losses get passed to their investors.”

“Without a mandatory, standardized process for public companies to disclose their climate-related financial risks, investors will remain in the dark, and not have the information they need to assess risks to their investments, including those derived from impacts that their investments have on climate change or on impacted communities and countries,” said Moonyoung Ko, Director of the Climate Finance Campaign of Americans for Financial Reform.


“We strongly believe that full scope emissions is an essential ingredient in disclosures that serve investors,” said Ivan Frishberg, Senior Vice President and Chief Sustainability Officer of Amalgamated Bank. “Our economy is already facing a series of cascading shocks connected to our disrupted climate. The pace of US and global real economy policy is currently not adequate to avoid dangerous levels of warming, making the work of the SEC even more important for investors.”

“The SEC’s statutory mission is to ‘protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.’ Due to the growing climate-related risks built into the financial markets, this will only be possible through mandatory disclosure,” said Steven Rothstein, Managing Director of CERES Accelerator for Sustainable Markets.

“By requiring transparency about how public companies make decisions that affect the future of their businesses, the SEC is fulfilling its mission to protect investors,” said Aarthi Ananthanarayanan, Director of Climate and Plastics of Ocean Conservancy. “Only then can investors make informed decisions and work together with companies as we move through a climate transition that sustains American jobs, our communities, and our economy.”


In July, Senator Markey led a letter to SEC Chair Gary Gensler urging the Commission to strengthen its proposed rule on the disclosure of climate-related risks to investors by requiring the addition of Scope 3 emissions, in addition to Scope 1 and Scope 2 emissions. 

In November 2021, Senators Markey and Merkley introduced the Fossil Free Finance Act, which would require the Federal Reserve to mandate that major banks and other Systemically Important Financial Institutions stop the financing of projects and activities that emit greenhouse gas emissions. 

The SEC’s proposed rule on the “Enhancement and Standardization of Climate-Related Disclosures for Investors” would require public companies to disclose emissions that result from a company’s facilities and electricity use, and in some cases require emission disclosures as a consequence of a firm’s activities but come from upstream and downstream activities like sold gas used by consumers. The proposed rule would also require public companies to disclose information on the impacts of climate-related natural events and transition activities as the company moves to emission reduction goals, and the degree to which risks are likely to have a material impact on business statements in the short and long term. 

Witness testimony can be found here:

  • Steven Rothstein, Managing Director of CERES Accelerator for Sustainable Markets
  • Ivan Frishberg, Senior Vice President and Chief Sustainability Officer of Amalgamated Bank
  • Moonyoung Ko, Director of the Climate Finance Campaign of Americans for Financial Reform
  • Aarthi Ananthanarayanan, Director of Climate and Plastics of Ocean Conservancy

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