US SIF: SEC's final climate disclosure rule a first step toward material financial reporting

    WASHINGTON, DC, March 06, 2024 /24-7PressRelease/ -- US SIF: The Sustainable Investment Forum, the preeminent voice advancing sustainable investing, today released a statement regarding the Securities and Exchange Commission (SEC) final rule on climate risk disclosure.

Maria Lettini, CEO of US SIF: Sustainable Investment Forum, made the following statement:

"We applaud the SEC for enacting the first ever mandatory reporting on financial factors related to climate risk. This exercise of the agency's authority to protect investors is an important first step in ensuring that investors have clear, comparable and reliable data for use in their investment decisions. Simply put, this rule will help investors assess climate risks more accurately.

"This new federal standard is an achievable floor of disclosure that many companies are already meeting. In 2022, 74% of companies in the S&P 500 disclosed information related to their climate risks. Forty-five percent of U.S.-listed companies report their Scope 1 and 2 greenhouse gas emissions and 20% of firms report at least some of their Scope 3 emissions. With new disclosure regimes coming to the market like California's disclosure laws and European reporting requirements under CSRD, both of which require scope 3 reporting, companies not making this important information available to investors will continue to fall behind.

"With this rule, investors will be able to better understand the costs to companies of physical risk and corporate expenses related to carbon offsets or renewable energy credits. In addition, investors will have an important private right of action if companies omit material information from their financial statements.

"While we are disappointed that the SEC chose to remove disclosure of Scope 3 emissions and add a trigger for disclosure of Scopes 1 and 2 in this final rule, companies will remain responsible to report material information to their investors.

"This rule is a floor, not a ceiling, for companies to report how their business is adapting to a global economy that is transitioning away from fossil fuels. Investors will continue to push for further standardization of climate information as it has a clear financial impact on their portfolios."

To read US SIF's previous statements and comments letters on disclosure, visit our Policy: Disclosure page.

About US SIF and the US SIF Foundation

US SIF: The Sustainable Investment Forum is the preeminent voice advancing sustainable investing. Members, who represent $5 trillion in assets under management or advisement, support US SIF's mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment, the generation of positive social and environmental impacts and supporting the shift toward a more resilient and equitable planet and society. https://www.ussif.org

US SIF is supported in its work by the US SIF Foundation, a 501(C)(3) organization that undertakes educational and research activities to advance the mission of US SIF, including offering trainings for advisors and other financial professionals on the Fundamentals of Sustainable and Impact Investment.

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