Representative Kathy Castor (D-FL) led almost 80 fellow House Democrats to send a letter to the Securities and Exchange Commission (SEC) Chair Gary Gensler to urge the federal agency to finalize a “strong and durable” climate disclosure rule.
In March, the SEC released a proposal that would require public companies to report their greenhouse gas emissions, along with “details of how climate change impacts their business,” according to Rep. Castor’s press release.
The letter sent by House Democrats is calling for the quick approval of this proposal.
“Enhanced climate-related disclosure is the direction of travel for capital markets around the world,” the lawmakers wrote in part. “You have drafted a well-reasoned proposal that is grounded in financial materiality, aligns with the demands of investors and market participants, and is clearly within the SEC’s mission, authorities, long-standing norms, and responsibilities. We urge you to finalize and adopt a credible mandatory disclosure rule as quickly as possible.”
The lawmakers would also mention that the United States should “lead, not follow” when it comes to instituting climate disclosure rules to global markets.
“U.S. capital markets are the envy of the world, and the SEC should lead, not follow, in implementing a strong climate-related disclosure rule. Investors need clear, comparable, and standardized disclosures to judge registrants' climate risks,” wrote the Democrats. “Further, beyond providing comparability for investors, finalizing a strong ruling will allow the SEC to align its requirements with those of other financial regulators around the world, reducing costs to issuers and providing more useful information to all market participants.”
Alongside Castor, Florida Representatives Darren Soto (D-FL) and Frederica Wilson (D-FL) signed the letter.
“We are not naive to the environment that has unfortunately injected politics into requirements that should not be controversial and will better enable investors to analyze investment risk and return, allocate capital efficiently, and prioritize investment stewardship and engagement. However, this should not be a reason for continued delay,” the legislators stated.
The SEC delayed its decision on the climate change disclosure rule in June.
