The SEC, in proposing certain climate-related disclosures, states that the purpose of
such disclosures is to “provide consistent, comparable, and reliable—and therefore
decision-useful—information to investors to enable them to make informed judgments
about the impact of climate-related risks on current and potential investments.”
While the SEC’s proposed rule is an important step forward, several elements of the current proposal would impede the SEC’s stated purpose in requiring such disclosures.
In sum, ClientEarth proposes the following recommendations to ensure adequate and enforceable climate disclosures that provide decision-useful information to investors:
- Require the disclosure of Scope 3 emissions without any limitations or qualifiers.
- Remove the safe harbor for Scope 3 emissions disclosures.
- Remove the Scope 3 disclosure exemption for SRCs.
- Afford SRCs the same timeframe for disclosure as accelerated and non-accelerated filers.
- Do not afford registrants one additional year to comply with Scope 3 disclosure requirements.
- Clarify the one percent threshold materiality requirement and do not allow offsets to be used as an accounting mechanism.
- Require companies to disclose whether they have a transition plan, what such a transition plan consists of, or, alternatively, why they have chosen not to implement a transition plan