The proposal comes as investors of all sizes — from mainstream asset managers such as BlackRock Inc. and The Vanguard Group Inc. to smaller firms focused on environmental, social and governance investing — are increasingly seeking more information on how companies across industries are addressing vulnerabilities to climate change.
Investors, Democrats and other ESG proponents argue that companies’ plans to combat climate risk, such as emission reductions, are material to their bottom line and standardization of metrics is long overdue.
“Investors need to know exactly how exposed individual companies are to climate risks. For that, they need consistent, comparable, and detailed data,” Sen. Brian Schatz, D-Hawaii, said in a statement. “This rule will give investors mandatory, standardized disclosures that they can compare across different companies.”
Republicans, meanwhile, contend the SEC’s work on climate disclosure and similar rulemaking oversteps its authority on securities regulation.
“Today’s action hijacks the democratic process and disrespects the limited scope of authority that Congress gave to the SEC,” Sen. Patrick J. Toomey, R-Pa., said in a tweet. “This is a thinly-veiled effort to have unelected financial regulators set climate and energy policy for America.”
