Like Countable?

Install the App
TRY NOW

senate Bill S. 2075

Should the SEC Require Publicly-Traded Companies to Disclose Climate Change-Related Risks?

Argument in favor

Climate change risk disclosures are one way to hold corporations accountable for their role in the climate crisis. They’re also an important tool to help investors understand their investments and how they could be affected by climate change. Requiring better disclosure of climate change risks could push investors and corporations to take more action to address climate change.

jimK's Opinion
···
10/18/2019
Awesome! Some legislation that begins to categorize and collect valuable info on climate change issues. Great job Elizabeth! Collecting data in this way, in a more or less standardized format, is a great tool for measuring and assessing green house gas emissions- which should help guide resources to address critical issues. I am so glad to see this. I just hope the dinosaurs in the Senate will at least recognize that climate change is a huge geopolitical, economic and humanitarian risk to our future and another life extinction level event for dinosaurs. Let’s hope that this time, they finally ‘get’ it.
Like (84)
Follow
Share
Ayush's Opinion
···
10/18/2019
Ok, can we get real here? Of course climate change is an issue! Our leaders’ ignorance to it might be the end of the human race! Republicans are denying the science to fill their wallets.
Like (41)
Follow
Share
RjGoodman's Opinion
···
10/18/2019
While risk disclosures are a good idea, nothing will happen until we take the Environmental Protection Agency back. All of the reporting in the world will not influence enough businesses to positively impact climate change. We need to take control of our government. VOTE!
Like (35)
Follow
Share

Argument opposed

Even without regulators’ intervention, many companies are already making their own climate change disclosures. The industry-led Task Force on Climate-related Financial Disclosures (TCFD) has released recommendations on this issue and is tracking companies’ adoption of its recommendations. Investors, such as BlackRock, are also encouraging greater disclosure. There’s no need for the SEC to get involved.

Steven's Opinion
···
10/18/2019
More virtue Signaling. Added burden on businesses do no benefit to the environment.
Like (12)
Follow
Share
Peter's Opinion
···
10/18/2019
Climate change is a Hoax!! Wake up people. We do not need the government overreaching like they did in the Obama administration and the New Democratic candidates want.
Like (9)
Follow
Share
Doug's Opinion
···
10/18/2019
No, climate change hasn’t been proven to exist, much less that it’s man made. Every climate change prediction made has not manifested.
Like (8)
Follow
Share

bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
    IntroducedJuly 10th, 2019

What is Senate Bill S. 2075?

This bill — the Climate Risk Disclosure Act of 2019 — would direct the Securities and Exchange Commission (SEC) to require an issuer of securities to annually disclose information regarding climate change-related risks. 

Specifically, every publicly-traded company would be required to provide information on:

  • Its direct and indirect greenhouse gas emissions;
  • The total amount of fossil-fuel related assets that it owns or manages;
  • How its valuation would be affected if climate change continues at its current pace or if policymakers successfully restrict greenhouse gas emissions to meet the 1.5 degrees Celsius goal; and
  • Its risk management strategies related to the physical risks and transition risks posed by the climate crisis.

Additionally, this bill would direct the SEC to tailor these disclosure requirements to different industries and impose additional disclosure requirements on companies engaged in the commercial development of fossil fuels.

Currently, while the SEC has issued guidelines suggesting that companies consider climate change’s effects on their assets, it hasn’t mandated any specific disclosures.

Impact

Securities issuers; the SEC; and climate change risk disclosures by securities issuers.

Cost of Senate Bill S. 2075

$0.00
A CBO cost estimate is unavailable. However, as written, Sen. Warren’s office says this bill shouldn’t have a cost to taxpayers.

More Information

In-DepthSen. Elizabeth Warren (D-MA) reintroduced this bill from the 115th Congress to require public companies to disclose critical information about their exposure to climate-related risks

"It's time to wake up and fight back against giant corporations that want to pollute our environment and ask taxpayers to clean up the mess. I'm reintroducing the Climate Risk Disclosure Act to give investors, and the American public, the power to hold corporations accountable for their role in the climate crisis."

In another statement, Sen. Warren argues that this bill will push investors to move their money out of fossil fuels

“My plan will push more investors to move their money out of the fossil fuel industry, accelerating the transition to clean energy. It will also demonstrate to investors that — if nothing else — climate change represents a serious risk to their money and they need to demand global action to address it.”

In a one-pager describing this bill, Sen. Warren’s office contends that it will “help the market appropriately assess the risk of climate change, which will help push private actors and government actors to act more decisively to address climate change.” Additionally, Sen. Warren’s office contends that it will help promote financial stability without spending any taxpayer money.

In comments before the House version of this bill passed the House Financial Services on a 34-25 vote, its sponsor Rep. Sean Casten (D-IL) said

“Climate change is a risk to the stability of the global financial system. This bill presents a market-based solution to understand the impact of a changing climate on companies and provide investors, lenders, and insurers with better information… We must act now to address climate change. We are running out of time… In just the past few decades rising temperatures have worsened extreme weather events; wildfire seasons are longer; in Illinois the painting season has been shortened from seven months to six months. Mosquitoes are expanding their territory, spreading tropical disease. Two feet of sea-level rise is already baked in. 
When I asked on the Science, Space and Technology Committee what cities we are most concerned about the answer was the entire Eastern seaboard. What does that mean if you are a property manager investing in assets on Miami [B]each? What does that mean if you are a seed developer who has seeds that are not going to be able to germinate at the rising temperatures in my home state of Illinois?  If you are an investor, you would like to know the answers to those questions. Many companies already make these disclosures, but more needs to be done. According to a 2017 KPMG study, half the world’s largest companies are acknowledging climate change as a financial risk… [O]ver 90 percent of the world’s largest companies are already reporting on their sustainability impacts, and smaller companies are following suit. There is much more that can be done. That is why the Climate Risk Disclosure Act is so important.”

In a 2013 Wall Street Journal op-ed co-authored with David Blood, former Vice President Al Gore — who has made climate change his signature issue since leaving public office — argued for incorporating carbon risk financial assessments. Blood and Gore advocated 1) identifying carbon asset risks across portfolios; 2) engaging corporate boards and executives on plans to mitigate and disclose carbon risks; 3) diversifying investments into opportunities positioned to succeed in a low-carbon economy; and 4) divesting fossil fuel assets. Although this bill doesn’t achieve all those aims, it addresses the first, which Blood and Gore wrote was the essential starting point: 

“At a minimum, investors should determine the extent to which carbon risk is embedded in current and future investments. This can be achieved by, for example, considering the key drivers of a company’s current and future asset base in the context of carbon risks and developing tools that quantify risks for valuations. Note that passive, index tracking funds should also identify their exposure to carbon risks since they too are vulnerable to stranding as fossil fuel-dependent assets make up roughly 10%-30% of most major exchanges.”

California Public Employees' Retirement Pension (CalPERS) supports this bill. It argues that it's necessary "because it will support investors in understanding the sustainability of their investments and in the development of the type of sustainable economy through which pension funds such as CalPERS can generate the returns we need over the long term."

However, it’s also worth noting that even without regulatory intervention, many companies have already committed to greater climate change-related disclosures. At the end of 2017, more than 240 companies, with a combined market capitalization of over $6.3 trillion, had expressed support for the TCFD’s climate change disclosure recommendations. Additionally, Climate Action 100+, a global investor initiative focused on 161 large greenhouse gas emitters, had 289 investors from 29 countries, with a total of over $30 trillion in assets under management, as of July 2019. In April 2018, 16 large banking groups also released a methodology developed under the UN Environment Finance Initiative to help financial institutions be more transparent about their exposure to climate risks and opportunities. 

In the current Congress, this legislation has 16 Democratic Senate cosponsors (including all Senators running for the 2020 Democratic presidential nomination) and has not received a committee vote. Its House companion, sponsored by Rep. Sean Casten (D-IL), passed the House Financial Services Committee by a 34-25 vote with the support of 24 Democratic House cosponsors.

Last Congress, this legislation had eight Democratic Senate cosponsors and didn’t receive a committee vote. There was no House companion in the 115th Congress.

This legislation is endorsed by former Vice President Al Gore and 33 environmental and scientific organizations, including 350.org, American Family Values, Anthropocene Alliance, As You Sow, Center for International Environmental Law, Ceres, Climate Hawks Vote, Dwight Hall Socially Responsible Investment Fund, Friends of the Earth, Gasp, Global Witness, Greenpeace USA, Institute for Agriculture and Trade Policy, League of Conservation Voters, Natural Investments LLC, Sierra Club, Sisters of St. Francis of Philadelphia, the Sustainability Group of Loring, Wolcott & Coolidge, Trinity Health, Union of Concerned Scientists, Vert Asset Management, and Mercy Investment Services.

This bill is likely to face strong Republican opposition. With Republicans holding the Senate, it’s unlikely to come up for a vote. Even if Democrats win a Senate majority in 2020, it’ll remain difficult for ambitious climate legislation to garner enough Republican senators’ support to meet the 60-vote minimum for passage in that chamber.


Of NoteIn an August 2019 Special Report on Climate Change and Land by the UN Intergovernment Panel on Climate Change (IPCC) in Geneva, experts highlighted how rising global temperatures are increasing pressures on fertile soil and potentially jeopardizing the planet’s food security. Valérie Masson-Delmotte, Co-Chair of one of three Working Groups that contributed to the 1,200-page report, also noted that people are already suffering the effects of climate change, saying, “Today 500 million people live in areas that experience desertification. People living in already degraded or desertified areas are increasingly negatively affected by climate change.” Working Group Co-Chair Hans-Otto Pörtner stressed that there is “no possibility for anybody to say, ‘Oh, climate change is happening and we (will) just adapt to it.’ The capacity to adapt is limited.”

In a June 2019 report, Moody’s Analytics reported that climate change could create tens of trillions of dollars in damages to the world economy by 2100. Rising temperatures and shifting precipitation patterns will affect agricultural production and universally hurt worker health and productivity. The report also noted that sea-level rise will threaten coastal communities and island nations. Ultimately, the report concludes that there are five major takeaways from climate change: 

  • Physical costs of climate change will compound slowly over time, so it won’t cause recessions. The only acute effects will originate from heightened occurrence and severity of natural disasters.
  • The most significant impacts of climate change won’t be felt until 2030 and beyond, and they won’t become especially pronounced until the second half of the century. Before that point, the tangible effects of climate change will mostly be felt in the form of increased incidence and severity of natural disasters.
  • The heterogeneous effects of climate change create different incentives and disincentives for countries to adopt public policies to regulate greenhouse gas emissions. Northern European countries (which will see some benefits from climate change) have fewer incentives to adopt policies to mitigate greenhouse gas emissions in comparison to the emerging economist of Southeast Asia (which will see some of the most profound negative impacts of climate change).
  • Climate change carries vast geopolitical risk. If it causes slower economic growth, it may cause massive international emigration from affected areas and put strain on certain countries that are receiving the immigrants.
  • The effects of climate change will be far more dire in certain locations than across entire countries, particularly in terms of the effects of sea rise.

In an April 2016 report, Freddie Mac predicted that climate change will eventually destroy billions of dollars’ worth of property, producing “economic losses and social disruption . . . likely to be greater in total than those experienced in the housing crisis and Great Recession." Building off a climate risk assessment by the Risky Business Project, Freddie Mac estimated that $66-160 billion worth of real estate will be below sea level by 2050; and by the end of the century, that range will increase to $238-507 billion.

Energy experts estimate that the global community will have to dramatically reduce fossil fuel consumption over the next 30 years in order to reach the goals of the Paris Agreement. This would mean generating nearly 0% of electricity from coal and 8% from gas by 2050, while also using carbon dioxide removal.

Due to climate change, the past half-decade is likely to become the warmest five-year stretch in recorded history. On a global scale, even small temperature increases can have major impacts on climates and ecosystems: for example, for every 1ºC increase, air’s moisture carrying capacity increases approximately 7% — leading to an uptick in extreme rainfall events. Those events can in turn trigger landslides, increase soil erosion rates and damage crops — and that’s only one example of how climate change can cause chain reactions.

Two consecutive Worldwide Threat Assessments under two different Directors of National Intelligence — the first in 2016, issued by James Clapper in the Obama administration, and the second in 2017, issued by Dan Coats in the Trump administration — have called climate change a global security threat that could cause global political instability, adverse health conditions, humanitarian crises, political unrest, and more. 

To understand existing corporate disclosures around climate change, the industry-led Task Force on Climate-related Financial Disclosures (TCFD) surveyed 2017 disclosures from over 1,700 firms from diverse sectors with broad geographical representation. It found that the majority of firms disclosed information aligned with at least one of its recommendations. However, it also found that while many companies describe climate-related risks and opportunities, few disclose climate change’s financial impact on themselves, and that disclosures vary widely across industries. The TCFD also found that disclosures were made in a variety of places, including sustainability reports, financial filings, and annual reports.

Additionally, many investors have taken a strong public stance in favor of disclosure. In his 2018 letter to CEOs, BlackRock CEO and Chairman Larry Fink urged them to disclose material financial risks related to climate change. Climate risk disclosure was also one of BlackRock’s engagement priorities in 2018.

However, writing in GreenBiz in 2018, Mahony Partners founder and managing partner Richard Mahony argued that the lip service paid to climate change disclosures hasn’t changed corporate reporting much, if at all: 

“[D]isclosures about climate risk in corporate filings barely changed from past years. Climate risk continued to be described in vague, boilerplate language and mainly regarded as a regulatory risk… Companies ignored even the relatively simple TCFD recommendation around governance, which said a company should discuss the board’s oversight of climate-related risks and opportunities. That’s a pretty low bar. A governance discussion doesn’t require fancy math or scenario modeling. What’s more, the broad discussion about climate risk has focused on the wrong companies. Big oil and gas producers are almost always the ones in the crosshairs, but climate change is affecting companies in nearly every industry.”

Mahony alluded to the need for regulators, who have historically shown “little appetite” for mandating climate disclosure, to get involved to compel greater disclosures by companies. He noted that the prospect of stronger regulation in Europe has made companies in France, the U.K., and Germany farthest along in preparing to disclose risks in accordance with TCFD guidelines.


Media:

Summary by Lorelei Yang

(Photo Credit: iStockphoto.com / pixbox77)

AKA

Climate Risk Disclosure Act of 2019

Official Title

A bill to amend the Securities Exchange Act of 1934 to require issuers to disclose certain activities relating to climate change, and for other purposes.

    Awesome! Some legislation that begins to categorize and collect valuable info on climate change issues. Great job Elizabeth! Collecting data in this way, in a more or less standardized format, is a great tool for measuring and assessing green house gas emissions- which should help guide resources to address critical issues. I am so glad to see this. I just hope the dinosaurs in the Senate will at least recognize that climate change is a huge geopolitical, economic and humanitarian risk to our future and another life extinction level event for dinosaurs. Let’s hope that this time, they finally ‘get’ it.
    Like (84)
    Follow
    Share
    More virtue Signaling. Added burden on businesses do no benefit to the environment.
    Like (12)
    Follow
    Share
    Ok, can we get real here? Of course climate change is an issue! Our leaders’ ignorance to it might be the end of the human race! Republicans are denying the science to fill their wallets.
    Like (41)
    Follow
    Share
    While risk disclosures are a good idea, nothing will happen until we take the Environmental Protection Agency back. All of the reporting in the world will not influence enough businesses to positively impact climate change. We need to take control of our government. VOTE!
    Like (35)
    Follow
    Share
    We need corporations to be aware of their impact on the environment and work to minimize or eliminate the damage, Our house is on fire. Help put it out.
    Like (17)
    Follow
    Share
    We must challenge climate change on every front.
    Like (16)
    Follow
    Share
    Yes, if public companies are producing lots of CO², which is what plants crave more than electrolytes, then yes they should be transparent about it. I bet no one got the reference. C'mon, Idiocracy was a fine film...
    Like (16)
    Follow
    Share
    Yes, corporations should be accountable for any risk they hold towards the environment and public health. Yes!
    Like (16)
    Follow
    Share
    Vote yes! The purpose of this bill is to increase accountability for climate destruction and provide transparency to investors. Then pass the GREEN NEW DEAL!
    Like (15)
    Follow
    Share
    These large corporations are creating negative externalities that cause detrimental effects our collective health and sustainability. We need to hold these companies accountable but also make it easy for the consumer/investor to make informed decisions.
    Like (12)
    Follow
    Share
    We need to make sure all companies and corporations follow ways to reduce the carbon footprint and to help with climate change because if they don’t well there’s a good chance that they won’t exist much longer and they won’t have all the money! Much less lives of their executives because in the end we’re all human and we pass in and there won’t be anyone to pass anything in if climate change isn’t taken care of!
    Like (11)
    Follow
    Share
    Why impeach: Rudolph W. Giuliani, the president’s personal lawyer, is running a shadow foreign policy in Ukraine that circumvents U.S. officials and career diplomats in order to personally benefit President trump. Igor Fruman and Lev Parnas. Look them up. North Korea just tested a submarine launched missile. He just released 10,000 Isis fighters into the world when he betrayed the Kurds. Our allies who have fought against Isis right beside our troops for years. They are being slaughtered right now. All because he has a tower in Istanbul. “The Americans betrayed us. We do not trust them anymore,” she added. These used to be our Kurdish allies that stood against ISIS. He is refusing to comply with the law. He is using the power of the presidency to withhold aide to one of the worst humanitarian crisis on the planet in exchange for political favors in order to sway the 20/20 election. He is acting like a criminal and threatening the life of the whistleblower. Mr. America first is sending troops to Saudi Arabia in support of a murdering dictator who spends millions at his hotels and resorts. Corey Lewandowski testified to congress that trump ordered him to obstruct justice. He is blocking information that pertains to the safety of our country from reaching congress. He has been threatening NOAA, a federal agency, with punishment if they do not disavow the truth and side with his lies. He invited the Taliban to Camp David the week of 9/11. He is a #PussyAssBitch He’s doctoring weather maps to try and prove he’s not an idiot. He has stayed at trump properties 293 days in 3 years, that’s our tax dollars going directly into his pocket. He took money from military daycares to pay for a wall that won’t work and no one wants. The Vice President and the Attorney General are both spending tax payer dollars on trump hotels, lining his pockets and currying his favor. He has privately instructed aides to skirt laws and regulations to get the wall built faster — and told them he will pardon them if necessary. He is pressuring a government agency to give a contract for his wall to a company whose chief executive is a donor to one of his top GOP allies in Congress. He took hundreds of millions from 127 different projects (FEMA being one of those) for his wall. He thinks nuking a hurricane is an idea. He is host the next G-7 at one of his own resorts. Again our tax dollars paying him directly. He taunted Iran by tweeting a classified image of an Iranian rocket that had exploded, thereby potentially compromising U.S. intelligence capabilities. His own company would save millions from the low interest rates he is demanding. He was going to give you tax cuts through your paychecks but decided not to. This year the richest of us payed less in taxes than the rest of us. He is destroying the economy with HIS trade war. We will soon average a 1.2 trillion deficit. He is repeating NRA talking points on background checks so expect no action taken regardless of the fact there has been 27 arrested over threats to commit mass attacks since El Paso( NOT TOLEDO). He made fun of republicans being afraid of the NRA and then caved after a 30 minute phone conversation with them. He bragged about indefinite child detention because it brings families together. He is refusing flue shots, that protect us all(google influenza pandemic), to immigrant children. He is attacking fellow congresswomen in really disgusting ways and making anti-Semitic remarks about Jews calling them disloyal. He thinks he’s the chosen one based on a conspiracy theory web sight. He has: Obstructed Justice. Is profiting from the Presidency. Colluded - They had a meeting & lied about it. Advocated political & police violence. Abuse of power. Engaging in reckless behavior. Persecuting political opponents. Attacking the free press. Violating immigrants Right to Due Process. Violating campaign finance laws. Racist: Speaks directly to and often tweeting straight from white supremacists. Calls them very fine people. Told fellow congresswomen to go back where they came from. Called them shit hole countries. Called them murderers and rapists. Calls her Pocahontas. Took out full page adds calling for the death of five innocent black kids in New York, 1989. Literally has said in an interview he has Hitlers speeches, My New Order in his nightstand. Our Money: Spent campaign finance money on hush payments to silence a porn star he had an affair with in order to hide it from the voters. Has spent over $100 million of our tax dollars playing golf at his own golf courses. Has never divested from companies and advertises and profits off the White House. Was going to cut Medicaid and Medicare funding to pay for the tax cuts he gave to the rich. Is actively destroying farmers lives with his trade wars that we all know only hurts our pockets not Chinas. Has made the lives of every truck driver across America as well as our own, more dangerous by removing safety regulations that only benefits the pockets of the CEOs of those companies. Has removed any and all protections we had in place from work safety, environment, women’s rights, LGBTQ rights and gives that power back to the CEOs, oil companies, men and old white men. Saudi funded lobbyist rented 500 rooms at a trump hotel he never divested from right after he became president. Wonder why? Sexual Predator: Accused by more than 20 women of molestation and rape. Bragged about said molestation on tape. Has cheated on all three wives (see above). Has made sexual remarks on camera about his daughter. Belittles and bully’s women. Not even sure he’s aware he has two daughters. Has allowed North Korea to grow there nuclear weapons program. Took the side of Putin over America’s own security agencies on the national stage. Lacks the intelligence and facts needed to communicate on a global level much less national one. Makes policy decisions based on FOX media. Lies when speaks. Doesn’t believe in science and quite often displays his ignorance of it. Russia: Lied about meetings with Russians. Lied about a trump tower Moscow. Personal attorney Michael Cohen (same guy who broke campaign finance laws under trumps direction) had contacts with russian officials. National Security aide Flynn resigned over Russian contacts. Jeff Sessions recused himself because of Russian contacts. Manafort resigned because of Russian contacts. Campaign foreign policy adviser Papadopoulos met with Russians then bragged about it to Australians who then turned that info over to our FBI. Sixteen campaign officials had contacts with Russia and at least nine others new about it. Russian mobster lived in trump tower. trump casino was flagged 106 times for lax money laundering standards and same Russian frequently stayed at trump casino. Has been selling real estate to Russians for years. It really is surprising how many connections to Russians this man has. Rick Scott, Marco Rubio, Bill Posey You are my representatives. OLC policy: The indictment or criminal prosecution of a sitting President would unconstitutionally undermine the capacity of the executive branch to perform its constitutionally assigned functions. It’s time to do your job. You swore an oath to this country, it’s people and me to uphold the constitution. The president has never upheld that oath. How do you want to be remembered?
    Like (10)
    Follow
    Share
    Climate change is a Hoax!! Wake up people. We do not need the government overreaching like they did in the Obama administration and the New Democratic candidates want.
    Like (9)
    Follow
    Share
    Absolutely. It impacts all of us.
    Like (9)
    Follow
    Share
    No, climate change hasn’t been proven to exist, much less that it’s man made. Every climate change prediction made has not manifested.
    Like (8)
    Follow
    Share
    Climate change has always been with us and humans have always tried to ADAPT to change! Let the FREE market take care of itself! Get the government out of SPECULATIVE phony political crap and stop teaching it to our children as if it were gospel truth!
    Like (7)
    Follow
    Share
    I think this is a very good effort! It will be far reaching and it’s detailed. There should also be education for employees and ongoing efforts (written) to support protection of citizens!
    Like (6)
    Follow
    Share
    Please vote for Elizabeth Warren’s bill to increase Transparency about how much distraction corporations are causing to our planet and to help diminish destruction of all life.
    Like (6)
    Follow
    Share
    Why it’s just more fake science that the UN been pushing for 50 years
    Like (6)
    Follow
    Share
    Disclosing Climate change risks is an important way to hold corporations accountable for what they do that aids the climate crisis. It would be an important tool for investors to know how their investments and how those affect climate change. Requiring better disclosure of climate change could push investors & investments to consider climate change.
    Like (6)
    Follow
    Share
    MORE