Jun. 16, 2022
Hi, I’m a resident of Washington State and would like to comment on the rule requiring public companies to make annual climate-related financial disclosures. I feel this rule is necessary because investors need all the information they can get to understand whether to support a company based on their environmental track record. This rule is needed because the current practice of relying on companies’ voluntary climate disclosures is inconsistent, inefficient, and costly. Investors spend significant time and money on shareholder voting initiatives to fill info gaps, and on verifying the unreliable information they can currently access. Smaller investors especially lack access to reliable information. As a small investor, I find it increasingly difficult to make sense of companies’ environmental disclosures, and this rule would go a long way toward making me feel more empowered and hopeful. I do feel there are some opportunities to strengthen this rule: Scope 3 (value chain) GHG emissions are only required if they are “material” as determined by the issuer, or if they have set a public Scope 3 emissions target. I believe this should be mandatory for all large registrants with reasonable assurance (Question 98). There is also a safe harbor from liability with no sunset that should be excluded in the final rule. According to this proposal, Scope 3 disclosures will be judged as not fraudulent unless “it is shown that such statement was made or reaffirmed without reasonable basis or was disclosed other than in good faith” (Pg. 489). The proposal should definitely incorporate more disclosures around environmental justice, transition for dislocated workers, in addition to community-level impacts (Question 15) I would like to answer some of the questions posed: Q15. (Pg. 75) Are there other specific metrics that would provide investors with a better understanding of the physical and transition risks facing registrants? Yes–I think it would be useful to include plastics/pollution, indigenous rights, land use, environmental justice, impacts to the community, and worker transition. Q25. (Pg. 95) Should we require a registrant to provide a narrative discussion of whether and how any of its identified climate-related risks have affected or are reasonably likely to affect its consolidated financial statements, as proposed? Yes, as an investor, I need to know how adjusting for climate change is already affecting the company and its financial statements. Q24. (Pg. 94) If a registrant has used carbon offsets or RECs, should we require the registrant to disclose the role that the offsets or RECs play in its overall strategy to reduce its net carbon emissions, as proposed? Yes, information about the use of carbon offsets and RECs–including the types of projects financed–is critical to assessing the credibility of net zero transition plans. Thank you for reading this public comment. Naomi Davidson