U.S. firms should disclose more climate risk data to investors -lawmakers

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Two U.S. Democratic Senators urged U.S. regulators on Thursday to ensure that publicly traded companies disclose detailed greenhouse gas emissions data that helps investors measure climate impacts and risks at those companies.

The lawmakers filed a comment letter to the U.S. Securities and Exchange Commission (SEC) in response to the agency’s call for public consultation as to how it might direct companies to report more about the environmental impact of their operations.

The information is key for investors seeking to understand how much a public company, or issuer, is exposed to climate risk, said Senators Brian Schatz of Hawaii and Sheldon Whitehouse of Rhode Island said.

The SEC is seeking to ramp up its environmental, social and governance (ESG) disclosures agenda to deliver on campaign pledges by President Joe Biden and other Democratic office holders to address issues such as climate change and social injustice. The agency chair, Gary Gensler has said the SEC eyes issuing a new rule in the second half of 2021.

“The market needs to know how exposed individual issuers are to climate risks, and how they plan to manage their exposure,” Schatz said in a public comment filed with the SEC alongside Whitehouse.

“The market will be a very powerful force for curbing climate change if investors can get the information needed to gauge financial firms’ real levels of exposure to climate risks,” Whitehouse said.

Former President Donald Trump’s regulators eroded investors’ access to material disclosures and their ability to push for ESG measures, and advocacy groups have been pushing Democrats to reverse that.

This month, Group of Seven (G7) wealthy countries backed moves to force banks and companies to disclose exposure to climate-related risks. Unlike Europe, the United States has few requirements for companies to disclosing data on such risks.

Industry groups oppose the efforts. The Chamber of Commerce has said it opposes regulations but supports enactment by the U.S. Congress of a narrow set of climate-change policies.

The Bank Policy Institute, which represents leading U.S.-based banks, argued in its comment letter that the SEC should avoid over-prescriptive disclosure standards for banks versus public companies and should consider separating climate disclosures from securities filings.

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