CATF supports SEC’s climate risk disclosure mandate, issues recommendations to strengthen rules and avert greenwashing
BOSTON — Clean Air Task Force (CATF) filed comments on Friday in support of the U.S. Securities and Exchange Commission’s (SEC) proposed climate risk disclosure rules, which require publicly traded U.S. companies to report how they assess and manage climate-related financial risk. CATF expressed its support for the rules while pointing out important opportunities the Commission must take to maximize their intended impact and provide investors with accurate information.
“CATF strongly supports the SEC’s efforts to mandate climate risk disclosure, which is critical to the stability of U.S. markets in the face of mounting climate change. The SEC’s rules are both long overdue and well within the Commission’s legal authority,” said Ann Weeks, Legal Director at Clean Air Task Force. “For these rules to work as the SEC intends, however, they must require disclosures in enough detail to enable investors to assess the real climate implications of corporate activities – particularly the greenhouse gas implications of their electricity procurement practices, and their reliance on carbon offsets to achieve net-zero or other emissions targets.”
CATF submitted two separate sets of comments. The first, jointly submitted by CATF and Green Strategies, encourages additional disclosures around corporate electricity procurement – helping investors identify a company’s true reliance on fossil fuel generation and providing accurate accounting of efforts to consider greenhouse gas reduction benefits to meet a company’s climate-related targets and goals. Under the proposed rule, a company’s disclosures could exaggerate its emissions reductions and hide its reliance on fossil fuels behind renewable energy commitments that, in practice, do little to reduce a company’s reliance on unabated fossil fuels for baseload power.
“Electricity procurement practices have a direct impact on a company’s exposure to climate risk, and investors must be able to understand that exposure and compare it with that of the company’s peers,” said Jeanette Pablo, Senior Fellow at Clean Air Task Force. “By mandating more specific disclosures around electricity procurement, the SEC can ensure investors and the market have access to information on the climate and financial risks associated with a company’s reliance on and use of fossil fuel generation.”
Read the full comments here.
The second set of recommendations, submitted in partnership with Clean Air Council, Clean Wisconsin, NCX, Partnership for Policy Integrity, and National Wildlife Federation, supports the SEC proposal to require disclosure of Scopes 1, 2, and 3 emissions, before the application of any carbon offsets. The comments recommend the SEC strengthen the draft disclosures related to carbon offsets so that investors can assess the accuracy of net-zero emissions claims. According to CATF’s comments, without that information, the proposed rules don’t adequately protect investors from the risks associated with a company’s potentially misleading or exaggerated climate commitments.
“A growing number of companies are making net-zero greenhouse gas emission commitments that require the use of carbon offsets,” said Kathy Fallon, Director of Land & Climate at Clean Air Task Force. “Investors need accurate information to assess the integrity of those offsets and better understand a company’s exposure to climate risk.”
Read the full comments here.
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About Clean Air Task Force
Clean Air Task Force (CATF) is a nonprofit organization working to safeguard against the worst impacts of climate change by catalyzing the rapid global development and deployment of low-carbon energy and other climate-protecting technologies. We work towards these objectives through research and analysis, public advocacy leadership, and partnership with the private sector. With nearly 25 years of nationally and internationally recognized expertise on clean air policy and regulations and a fierce commitment to fully exploring all potential solutions. CATF is headquartered in Boston, with staff working virtually around the U.S. and abroad.
