The US Securities and Exchange Commission approved new climate disclosure requirements for public companies, part of the Biden administration’s climate policy.
Environmental advocates wanted these disclosures, but many feel the rule doesn’t go far enough and leaves investors uninformed about climate risks.
Leslie Samuelrich, president of the sustainability-focused mutual fund company Green Century Funds, said, “It’s a step forward, but we feel it’s too little, too late.”
“Investors deserve better than where the SEC landed with its disclosure rule,” said Hana Vizcarra, a senior attorney at the group Earthjustice, in an emailed statement to Bloomberg News.
The SEC’s new rule mandates that public companies provide specific climate disclosures, primarily focusing on reporting greenhouse gas emissions, for the first time.
Large public companies are obligated to disclose their direct emissions, known as Scope 1 and Scope 2, but only if they consider them “material” — significantly impacting their financial performance.
The decision not to require disclosure of Scope 3 emissions is “very short sighted,” said Danielle Fugere, president of the shareholder activist group As You Sow.
Since other countries are starting to require this information, “I expect companies will continue to be under pressure to report more than what’s required,” she said.
As You Sow has worked with investors to file shareholder resolutions pushing companies to disclose their total greenhouse gas emissions, and Fugere said she anticipates those efforts will continue despite the rule’s narrower scope.
