Jun. 17, 2022
To whom it may concern, Thank you for the opportunity to comment on the proposed rule The Enhancement and Standardization of Climate-Related Disclosures for Investors. I am Deepti Kannapan, an aerospace engineer with an Engineering Design background. I have a Master of Science degree in mechanical engineering from the University of California, Santa Barbara. I strongly support this new rule, and welcome the prospect of clearer and more standardized climate-related information from companies whose disclosures have, thus far, been opaque and overly self-congratulatory. I consider climate risk to be related to a measure of a registrant's unused opportunities for GHG mitigation. For example, a company in a relatively easy-to-decarbonize industry that fails to take decarbonization efforts may face more customer backlash (and risk) than a company in a hard-to-decarbonize industry that makes use of best available practices. (Even though the latter company may have higher emissions overall.) I believe the proposed disclosures will provide useful information for making those comparisons. However, I have two comments: 1. Regarding the Request for Comment #111, I think GHG intensity should be specified per unit of production, broken out by product category. I would consider a company with higher GHG intensity (than its peer companies) in a particular product category to have higher risk. For example, for a company that produces both physical products and web services, I would compare its GHG intensity for physical products with other companies that produce those products, and compare its GHG intensity for web products with other web companies. Comparing the aggregate GHG intensity across all product categories may not accurately reflect which company has more unused opportunities for GHG mitigation, since products and industries vary widely in their difficulty to decarbonize. 2. In addition to GHG intensity, I would like to know how dependent a registrant's business model is on high sales volumes and wasteful design practices like planned obsolescence. A company that produces products with shorter life cycles and (resultant) higher sales volumes than its competition (such as 'fast fashion' or cheap electronic products) has more unused opportunities for GHG mitigation, even if its GHG intensity may be lower. However, I would consider this company to have higher climate risk, since its business model may not be viable under future regulation or market pressure to pivot to more durable products. For this reason, I would suggest that a measure of product durability be added to the disclosure. Please see below for relevant literature. Thank you. Sincerely, Deepti Kannapan M.S. Mechanical Engineering, UC Santa Barbara, B. Tech and M. Tech Engineering Design, Indian Institute of Technology, Madras * * * Bibliography: - Rivera, Julio L., and Amrine Lallmahomed. "Environmental implications of planned obsolescence and product lifetime: a literature review." International Journal of Sustainable Engineering 9.2 (2016): 119-129. - Peters, Greg, Mengyu Li, and Manfred Lenzen. "The need to decelerate fast fashion in a hot climate-A global sustainability perspective on the garment industry." Journal of cleaner production 295 (2021): 126390.