Commanding Transparency : The Emerging Frontier of SEC-Mandated Climate Risk Disclosures

With a growing consensus that climate change poses acute risks to the global economy, companies increasingly disclose their climate-related risks to investors. However, such climate risk disclosures lack uniformity, complicating many investors’ ability to accurately compare and ascertain these risks. A decade ago, the Securities and Exchange Commission promulgated interpretative guidance in this area, but no meaningful change resulted. In response, some members of Congress have introduced the Climate Risk Disclosure Act, which seeks to mandate and stipulate the content of climate risk disclosures. This Comment examines the proposed legislation and offers recommendations for alternatives that consider the agency’s definition of materiality and its current rulemaking trends. Meanwhile, it notes that investor-driven standards, such as those published by the Task Force on Climate-Related Financial Disclosures, will likely drive uniformity and participation going forward