Advocates of the newly formed Initiative on Climate Risk and Resilience Law (ICRRL) are advocating the Securities and Exchange Commission (SEC) bolster climate change protections with the finance industry.
The ICRRL is a joint initiative that includes the Columbia Law School’s Sabin Center for Climate Change Law, the Environmental Defense Fund, the Institute for Policy Integrity at New York University School of Law, and the Vanderbilt Law School.
“Climate change presents grave risk across the U.S. economy, including to corporations, their investors, the markets in which they operate and the American public at large,” the ICRRL noted in an SEC filing detailing recommendations for business climate change disclosures. “Unlike other financial risks, however, climate risk is not routinely disclosed to the public. The SEC should adopt an approach that recognizes the importance of discussing climate risks in financial disclosure forms. Many impacts of climate change can be quantified and monetized, and should therefore be treated no differently than other financial risks.”
ICRRL recommendations, per the organization, include the SEC establishing mandatory climate risk disclosure requirements producing comparable, specific, and decision-useful information for investors; moving expeditiously to establish climate risk disclosure requirements; and seeking stakeholder input on standards without industry participants possessing the final determination.
“There is widespread demand for climate risk disclosure among investors,” the ICRRL concluded in its filing. “The proliferation of voluntary standards, many of which have already received considerable buy-in, indicates that the creation of and compliance with robust climate risk disclosure standards is already feasible for both regulators and corporations.”
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