SEC Chair Gensler says investors want mandatory disclosure on climate risks

Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC), speaks during a Senate Banking Committee hearing in Washington, D.C., U.S., on Tuesday, July 30, 2013.

Andrew Harrer | Bloomberg | Getty Images

Securities and Exchange Commission Chair Gary Gensler says he wants mandatory disclosure on climate risks, and he wants the agency to develop a rule by the end of the year.

Speaking at a webinar on Wednesday morning, titled “Climate and Global Financial Markets,” Gensler said investors are demanding more information on climate change. He said prior SEC guidelines on climate disclosure were voluntary, and this had resulted in inconsistent disclosures.

“Investors are looking for consistent, comparable, and decision-useful disclosures so they can put their money in companies that fit their needs…. Companies and investors alike would benefit from clear rules of the road,” Gensler said.

In March, the SEC sought comment from the public on climate change disclosures.

“More than 550 unique comment letters were submitted in response to my fellow Commissioner Allison Herren Lee’s statement on climate disclosures in March,” Gensler said. “Three out of every four of these responses support mandatory climate disclosure rules.”

He said he has asked his staff to consider whether climate disclosures should be filed as part of a company’s Form 10-K, the annual report a company files on its financial performance. 

Gensler also wants disclosure to be “decision useful.” Such useful information might include how the company’s leadership manages climate-related risks and opportunities, as well as metrics related to greenhouse gas emissions, financial impacts of climate change, and progress toward climate-related goals.

He also wants to keep companies accountable for their pledges on addressing climate change, noting that 92% of companies in the S&P 100 plan to set emission reduction goals. 

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