Jun. 16, 2022
June 16, 2022 Thank you for putting together such a comprehensive set of rules. I have two comments based on my experience at the Federal Reserve working on all aspects of bank stress testing - from scenario design to reviews of bank submissions. 1. The results will be easier to audit and more comparable if SEC provides scenarios for analysis. If you review current TCFD reports by banks that publish them, you will see the evidence of \"scenario shopping\", i.e. picking a scenario that poses the least risks given the portfolio. To avoid this, and to ensure comparability of the results, it would be helpful to publish climate scenarios that firms should include (along with their own) in their calculations. 2. Scope 3 emissions are very important to keep, for all the reasons you raise in your document. Recent push-back brings up concerns about the undue burden on small and medium-size businesses along the supply chain. To alleviate such concerns, it might be helpful to explicitly spell out that for low-materiality suppliers and customers, for the purposes of Scope 3 measures, industry averages can be applied. This would most likely be the practice anyway, but spelling it out explicitly will reduce the pushback against including scope 3 requirements in the rules.