WASHINGTON, D.C. [07/10/19]—Today, U.S. Senator Tina Smith (D-Minn.) announced that she is pushing for new requirements for publicly traded companies to disclose critical information about how much they are contributing to climate change, including the extent of their greenhouse gas emissions and their exposure to climate risk.
Originally introduced in 2018, the Climate Risk Disclosure Act will help investors appropriately assess climate-related risks, accelerate the transition from fossil fuels to cleaner and more efficient energy sources, and reduce the risks of both environmental and financial catastrophe.
It builds on the work of former Vice President Al Gore, who has warned that ignoring the risks of climate change is producing a “carbon bubble” that will have severe economic consequences. The bill was led by Sen. Elizabeth Warren (D-Mass.).
“The United States can either lead or follow when it comes to the clean energy transition,” Sen. Smith said. “I believe we should lead. This legislation would help investors know the serious risks associated with our changing climate, and then help us get to work on combatting these risks for the good of our public health and America’s economic competitiveness.”
The Climate Risk Disclosure Act directs the U.S. Securities and Exchange Commission (SEC), in consultation with climate experts at other federal agencies, to issue rules within one year that require every public company to disclose:
- 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.
The Climate Risk Disclosure Act also directs the SEC to tailor these disclosure requirements to different industries and establish additional disclosure requirements on companies engaged in the commercial development of fossil fuels. The legislation 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 the climate crisis and promote financial stability without costing a penny of taxpayer money.
The legislation is endorsed by Vice President Al Gore, and over 20 organizations: 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.
The Climate Risk Disclosure Act is cosponsored by Senators Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-R.I.), Chris Van Hollen (D-Md.), Amy Klobuchar (D-Minn.), Kirsten Gillibrand (D-N.Y.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Edward J. Markey (D-Mass.), Jeff Merkley (D-Ore.), Kamala Harris (D-Calif.), Dianne Feinstein (D-Calif.), Tom Carper (D-Del.), and Senate Democratic Leader Chuck Schumer (D-N.Y.).
You can read a summary of the bill here.