SEC’s Climate Compromise Deserves Support
After more than two years of effort, its new rules strike a good balance. Here come the lawsuits.
Some disclosures are more valuable than others.
Photographer: Eric Thayer/Bloomberg
Investors want to understand the risks and costs that companies face as they adapt to climate change. A new Securities and Exchange Commission rule would help them do precisely that. Unfortunately, it’s under attack.
The idea is simple. Many large public companies produce glossy sustainability reports showcasing their efforts to combat pollution and global warming. Yet finding reliable data in this sea of marketing is a struggle. The SEC, which first provided guidance on climate disclosure in 2010, has now required standard disclosures on material risks and costs. That raises the bar significantly, creating legal risks if companies supply false or misleading information.