Jun. 14, 2022
Secretary Vanessa A. Countryman Countryman, We all need access to standardized, comparable information about public companies’ vulnerability to climate change, their current greenhouse gas (GHG) emissions, and their plans to manage climate risks and make good on their public climate commitments. Permitting companies to voluntarily choose what and how they want to report, and even whether or not they want to disclose their climate-related financial risks, makes it impossible for investors in individual stocks to do due diligence. It is even worse for those of us investing in broad, diversified funds, ETFs, and low-cost index funds (which is what so many of us smaller investors use - people like nurses, teachers, and firefighters who have a retirement plans like a 401K, pension, or IRA). Without a standardized format and required reporting, there can be no low-cost index funds that exclude bad actors, because fund managers will not be able to easily evaluate and verify that the companies they include are actually making and following through on climate commitments. I fully support the Securities and Exchange Commission (SEC)’s recent proposal (87 FR 21334; File No: S7-10-22) to require public companies to make standardized, mandatory disclosures about their climate-related financial risks within annual SEC filings. I support the inclusion of Scope 1 (business operations) and Scope 2 (purchased energy) GHG emissions reporting, in absolute and intensity terms. I strongly encourage the SEC to strengthen the final rule by requiring Scope 3 GHG emissions (e.g., product and supply chain emissions) disclosure from all large registrants, and to include disclosures around environmental justice, Indigenous rights, a just transition for dislocated workers, and community-level impacts. This proposal is a vital step forward to fix a broken system of inadequate, not comparable, voluntary climate risk disclosure. It will protect investors both large and small, encourage prospective retirement savers to invest in the U.S. capital markets (weighted toward companies which are moving our planet in the direction we need to go), and provide market participants with the climate-related information they need to accurately price climate risk and make well-informed investment decisions. Sincerely, Tawny Reynolds