SEC Re-Affirms Commitment to Climate Risk Disclosure Rule

On September 12, 2023, SEC Chairman Gensler testified before the Senate concerning a number of significant issues for the SEC.  Among them was the SEC's still-pending rule on climate risk disclosures, which was first proposed in March 2022.  Chairman Gensler took advantage of the opportunity offered by this testimony to once again re-affirm his support for the SEC's proposed climate disclosures, stating that "[a]lready today, issuers are making climate risk disclosures" and so, "in fulfilling the Commission's important role, we put out for comment a proposal about climate-related disclosure to bring consistency and comparability to such disclosures."  In effect, Chairman Gensler reiterated one of the primary rationales behind the proposed climate disclosure rule--that investors are demanding this information, and the SEC should therefore ensure that the data is provided to investors in a useful way that enables comparability between different industries and companies--a key rationale behind much regulation. 

Still, Commissioner Gensler also revealed a certain degree of flexibility concerning the details of the proposal.  In his prepared testimony, he stated the SEC would "consider adjustments to the proposed rule" based in part on the "more than 15,000 comments" that the SEC had received.  Further, in response to certain questions posed by Senators, Chairman Gensler further indicated that Scope 3 emissions were understood to be particularly complex as a subject matter for disclosure, which may indicate that the ultimate SEC rule may reveal a more flexible approach to such disclosures.  Nonetheless, the key point is clear--the Biden Administration's SEC does not intend to back away from its climate risk disclosure rule.  And the publications of this climate disclosure rule may occur within a matter of weeks.