SEC Chairman Gary Gensler recently delivered prepared remarks before the UN Principles for Responsible Investment (PRI) webinar on “Climate and Global Financial Markets.” Gensler’s comments provided insight on what the SEC must do to bring greater clarity surrounding climate disclosure.
SEC staff is reviewing more than 6,000 letters, including 550 that are unique, thought-provoking comments and suggestions, of which three out of every four responses are in support of mandatory climate disclosure. With overwhelming support for mandatory climate and ESG reporting, exactly what does such disclosure look like?
Climate-related guidance from the SEC was last updated in February of 2010. A review of S&P 500 issuers’ filings following the updated guidance found that filers generally did not engage in “quantifying risk or past impacts” with respect to climate. They also tended to use “boilerplate language of minimal utility to investors.”
SEC Chair Gensler asked the staff to develop a mandatory climate risk disclosure rule proposal for the Commission’s consideration by the end of 2021. The question on the minds of many boards and C-Suite executives of both public and private companies is just what will the SEC propose to help clarify climate risk disclosure?
It’s important to note that many companies and other reporting entities are already publishing sustainability reports in response to increasing demands for ESG and climate disclosure from key stakeholders including investors, employees, customers, communities and global regulators. To assist companies in this process, the Governance and Accountability Institute (G&A) and DFIN developed a five-step engagement process for organizations who are embarking on their ESG and sustainability journeys.
DFIN’s ESG Team is tracking the evolution of SEC reporting. DFIN’s EDGAR Pro tool simplifies research on the rapidly evolving filings to help stay abreast of this fast-moving SEC ESG disclosure landscape.
Conducting strategic analysis and recommendations? Evaluating new business initiatives? Support stakeholder communications, build your annual proxy and analyze ever-evolving ESG disclosures by extracting meaningful data from real-time SEC Filings using EDGAR online.