US timeline slips on new climate disclosure rule
The US Securities and Exchange Commission (SEC) is running months late in releasing a proposal meant to require publicly traded companies to disclose climate-related risks.
The pending rule is meant to set a consistent standard for climate risk disclosures, but the agency missed a goal to release the proposal by the end of last year. SEC chairman Gary Gensler said last week it was "essential we get this right" so companies would assess climate risks and investors would have needed information.
"I am now working closely [with] our staff and fellow commissioners to work out the details of a mandatory climate risk proposal for our capital markets," Gensler said on 11 February in a post on Twitter.
The disclosure rule, if adopted, would replace SEC guidance issued in 2010 that left it up to companies to determine what climate data to report to investors. Gensler has said he wants that climate data to be consistent and comparable. But any rule would have to align with SEC authorities that restrict required disclosures to information that is "material" to investors.
Oil groups have urged the SEC to retain broad flexibility on climate data and said requiring too much disclosure could run afoul of the US Constitution. Some oil groups have argued that President Joe Biden should prod the SEC to drop the rule, which they say would raise gasoline prices by restricting financing to the industry.
"[Biden] could just say we are going to back off on regulations at the SEC, and others, that will elevate climate change over affordable reliable energy for Americans," Western Energy Alliance president Kathleen Sgamma told a panel of Republicans last month.
But Democrats say the SEC should quickly unveil the proposal and end internal debates that have bogged down its release. Even after the agency releases the proposal, it will take months to receive public comment and then develop a final rule, which would likely give companies months or years to comply.
"These delays are unwarranted and unacceptable," US senator Elizabeth Warren (D-Massachusetts) said in a letter on 9 February. "Every day of continued delay means that the SEC is failing to meet its mission."
The SEC is separately aiming to propose amendments by April to an anti-corruption transparency rule the agency issued in 2020 under "section 1504" of the Dodd-Frank financial law. That rule will require public oil and mining companies to disclose tax, royalty and other payments to governments around the world starting in fiscal 2023. Critics say the existing rule fails to offer enough granularity on payments to be able to identify corruption.
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