May. 13, 2022
May 13, 2022 Dear Secretary Countryman, The SECs proposed rules to regulate climate disclosures for public companies are a welcome addition to disclosure requirements. This is a needed advance to help investors make informed decisions regarding risks on their investments on a more reasonable long-term timeframe, the length of timeframe that most individual investors rely on. The loophole in how the language is presently written around scope 3 emissions accounting should be closed, however. Companies are asked to disclose their scope 3 emissions \"if material\". This language is vague and is likely to cause the same type of out-sourcing as seen under environmental regulation when reporting is required. Similarly, to assure investors that emissions are fairly reported, at a minimum there should be a requirement for reasonable assurance - an affirmative attestation that the information is fairly presented in all material respects. Walmart sets an example as a global-sourcing company, on including scope 3 reporting with an aim to manage risks of the changing climate. Walmart, \"As a large omni-channel retailer with millions of customers worldwide and a global sourcing footprint, leads by reducing emissions in operations and supply chain while galvanizing collective action across industry,\" demonstrating that including the full accounting for emissions can be done on a global scale. As they note, \"A strong climate action strategy will help us manage the physical and transition risks associated with climate change, strengthening the resilience of our business and helping us create value for stakeholders,\" see https://corporate.walmart.com/esgreport/esg-issues/climate-change, accessed May 13, 2022. Many companies are already making these types of disclosure. I applaud the SEC for exercising its mandate to ensure that investors and the public have access to basic information about the risks that climate change may have on their investments. Climate change stands to create significant instability and disruption in our financial and economic systems, as it already has. Having data about its likely effects on companies assets and long-term business outlook is essential for investors to make informed decisions and protect the wellbeing of our economy. Please pass a strong climate disclosure rule as soon as possible.