In their Joint Statement on the proposed changes to Regulation S-K, Commissioners Jackson and Lee note the following in respect of disclosure of climate change risk:
“Additionally, the proposal does not seek comment on whether to include the topic of climate risk in the Description of Business under Item 101. Estimates of the scale of that risk vary, but what is clear is that investors of all kinds view the risk as an important factor in their decision-making process. Yet it remains tough for investors to obtain useful climate-related disclosure. One argument against mandating such disclosure is that climate risk is too difficult to quantify with acceptable accuracy. Whatever one thinks about disclosure of climate risk, research shows that we are long past the point of being unable to meaningfully measure a company’s sustainability profile.”
The Commissioners encourage commenters to provide data and analysis on whether climate change risk transparency should be addressed in a final rule.