Investor Protection

SEC’s Proposed Climate Disclosure Rule Will Increase Transparency for Investors

Washington, D.C. — Yesterday, the Securities and Exchange Commission (SEC) voted to advance a proposed rule that would require public companies to disclose information about climate-related risks to investors. Previously, in June 2021, CFA submitted a detailed comment letter to the SEC, emphasizing that the SEC has both the authority and responsibility to facilitate disclosure of the climate-related information that investors have deemed material to their investment decisions.

“We are pleased to see the SEC move one step closer to providing investors with this decision-useful information, and importantly, to eliciting these disclosures with a level of specificity and assurance that seeks to promote their usefulness and reliability,” said CFA Financial Services Counsel Dylan Bruce. “By improving the consistency, comparability, and dependability of climate-related issuer disclosures, the SEC’s proposal would enable investors to better understand how climate risks affect the public companies in which they are invested, and subsequently, will promote more efficient pricing of risk and better capital allocation.”

“It is incumbent upon the SEC to facilitate companies’ disclosure of accurate and reliable information that investors can understand, and in a way that enables investors to make meaningful comparisons across the market,” said CFA Director of Investor Protection Micah Hauptman. “This proposed rule appears to accomplish these goals, based on our initial review. We look forward to delving into the details of this proposal and providing our feedback in a comment letter to the agency.”

Contact: Micah Hauptman, 202-939-1004

Contact: Dylan Bruce, 202-642-1704