NEW YORK, NY, WEDNESDAY, JUNE 22, 2022 - Last Friday, ICCR submitted comments to the SEC on its proposed rule, The Enhancement and Standardization of Climate-Related Disclosures for Investors, a rule meant to facilitate climate risk assessment for all investors.
The SEC issued the proposed rule in March and invited market participants to provide feedback via public comment. Given the outsized threat climate change presents to the corporate and investor communities, numerous organizations have weighed in to support the rule’s adoption.
In its comment, ICCR made clear that it views climate-related disclosures as critical for effective investment analysis and decision-making and, for that reason, is strongly supportive of the Proposed Rule, most importantly its measures to establish a baseline of climate risk information accessible to investors of all sizes.
ICCR also offered recommendations to strengthen the consistency and comprehensiveness of the disclosures that will result from the Proposed Rule across the topics of governance, attestation, offsets and more, but most notably it emphasized the following themes for improvements:
- Scope 3: ICCR strongly recommended that the SEC require Scope 3 emissions disclosure for all public companies, phasing in Scope 3 disclosures for smaller registrants on a longer timeframe. This information is essential both for investors and companies that have adopted GHG emissions reduction commitments and are working to manage climate risk;
- Just Transition: ICCR recommended that the SEC modify the definitions of physical and transition risks to include potential and actual impacts on key stakeholders such as employees and communities as these impacts may lead to a variety of business risks that can affect the likelihood of success of companies’ climate transition plans;
- Policy alignment with climate strategy: ICCR also underscored investors’ interest in understanding the extent to which corporations align their federal and state policy advocacy - including through their trade associations - with the goals of the Paris Agreement.
Said Josh Zinner, ICCR’s CEO, “In addition to ICCR’s submission, many of our institutional members also submitted their own comments to the SEC. As the role investors can play in either mitigating or exacerbating environmental and social challenges receives heightened scrutiny, it is critical that the SEC hear sound arguments from the responsible investment community about the severe and systemic risk the climate crisis represents for their portfolios, as well as for the planet and its people. We are hopeful these supportive comments will help speed the adoption of this important rule.”
Said Stephanie Lavallato, ICCR Associate Program Director, Just Transition, “While just transition-related topics were not addressed in the SEC’s proposed rule, we believe disclosure of the stakeholder impacts of corporate climate transition plans are imperative to understanding and managing climate-related risks. A company’s impacts on its workforce and communities, including Indigenous Peoples – such as the way local infrastructure development or power plant closures may impact jobs, local tax revenues, pollution, etc. – can make or break its ability to rapidly transition towards a low-carbon economy.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.