Apr. 11, 2022
Dear SEC, Writing to comment on the proposed rule File No: S7-10-22 The Enhancement and Standardization of Climate-Related Disclosures for Investors. Having reviewed the rule, I would like to commend the commission on the quality of the proposed rule and voice my support for its adoption. I think this is a good step towards contextualizing a class of financial risks that are ascendant. Surely, companies and investors of all stripes will be served by the additional information generally, and knowledge of important risks specifically. I hope the commission will implement this rule, and finance its enforcement to the highest effect. I have heard, notably from the Wall St Journal's editorial board, that this rule will be onerous, and disincentivise capital formation. I strongly disagree with this vein of criticism, and I hope WSJ's shallow critique does not bias anyone at the SEC against this rule. It is irresponsible and unwise to ignore risks. This rule will help standardize and regularize our collective understanding of climate based risks. It will allow companies, their creditors, and investors to make better informed decisions with the aid of more useful information. There is no downside to building this capacity, clarifying a shared factual vocabulary, and insisting on some measure of wisdom in the public markets. I will additionally support the production or clarification of regulatory tools by which the SEC may require additional production and disclosure of information related to this type of risk. For instance, I would support expanding the scope of businesses, within your jurisdiction, that may fall under this rule; and the clarification, enhancement, and standardization of so-called Scope 3 and product lifecycle emissions disclosures. While I appreciate that, as the TCDF noted in their final report Recommendations of the Task Force on Climate-related Financial Disclosures, "The gaps in emissions measurement methodologies, including Scope 3 emissions and product life-cycle emissions methodologies, make reliable and accurate estimates difficult." This is a vital piece of contextualizing financial risks in this context. As our tools and models improve our ability to estimate what Scope 3 and product lifecycle costs will be, publicly traded companies should be obliged to incorporate that analysis. In fact, I fear that allowing the exclusion of such significant risks in financial disclosures will allow, even incentivize, evasion of this currently proposed disclosure rule. Essentially, I am in favor of this proposed rule, and would like the SEC to maintain this momentum and shore up this regime. The markets, publicly traded companies, and the public all stand to benefit from this good work. Thank you for your time. Best Alex