Feb. 20, 2023
February 20, 2023 I am writing in response to The Securities and Exchange Commissions proposed rule The Enhancement and Standardization of Climate-Related Disclosures to Investors and am grateful for the opportunity to submit my opinion on this topic. Since the SEC began efforts to provide climate-related risks to its investors in 1970, many businesses welcomed the information and used it as resource to assist them with their investment decision-making. The Proposed Rule would require registrants to include information about certain climate-related disclosures in their registration statements and periodic reports such as information about climate-related risks that are likely to have an impact on their business, result of operations, or financial condition. Another requirement of the SEC proposal and probably my favorite and most significant in terms of environmental impact, is the requirement that all public companies disclose information about its direct greenhouse gas emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2). Moreover, registrants would have to disclose greenhouse gas emissions from upstream and downstream activities in their entire value chain (Scope 3). This is a vast improvement from the set of disclosure standards already in place because companies are currently not mandated to disclose their Scope 1 or Scope 2 emissions and even rarer for companies to provide t he documentation for these numbers. One area that has room for improvement within the Proposed Rule is that it currently does not mandate that all public companies abide by the GHG Protocol promoted by the World Resources Institute and the World Business Council for Sustainable Development. By doing so, it is diverging from a uniform global framework that could otherwise create a more standardized and widely recognized approach. One clarification that I would like to inquire about is who would oversee enforcing the Proposed Rule? Would it be up to the Federal Government or private companies to oversee and enforce any penalties on companies who fail to disclose the climate-based information? I think that the Federal Government should oversee the enforcement of the Proposed Rule as opposed to private companies who could bring forth a string of securities lawsuits.