Ceres calls for SEC to get tough on green disclosures

May 21, 2021

Not-for-profit sustainability advocacy organization Ceres is urging companies and investors to get behind its campaign for more disclosure on carbon footprints.

The Boston-based group is calling on the Securities and Exchange Commission (SEC) to establish a strong minimum standard for any climate disclosure rules it issues. Ceres wants such standards to be based on its own “Statement of Essential Principles for SEC Climate Change Disclosure”, to which investors are now being invited to endorse.

“Right now, we have a historic opportunity to shape how US financial markets address the climate crisis now and in the future,” said Steven Rothstein, managing director of Ceres Accelerator for Sustainable Capital Markets.

“If we want the US to achieve 50% cuts in emissions, mandatory climate disclosure is fundamental.”

Ceres statement comes as the SEC is seeking public comments for it to develop corporate climate change disclosure rules.

In a statement in March when the US regulator opened the consultation, Allison Herren Lee, then acting chair of the SEC, said investor demand for disclosures had grown “dramatically”. She asked SEC staff to “evaluate our disclosure rules with an eye toward facilitating the disclosure of consistent, comparable, and reliable information on climate change”, with the aid of external input.

“We know that when it comes to financial risks, what gets measured gets managed,” said Ceres’ Rothstein in an email to potential supporters. “Standardised, mandatory disclosure will establish rules of the road, benefiting both companies and investors.

“Companies will be better positioned to protect themselves from future climate risks, and investors will have better information to more accurately analyse their portfolios and make smarter, better investing decisions.”

Ceres said it had successfully petitioned the SEC to issue climate risk disclosure guidance to companies in 2010. It now wants to go “even further” and require all publicly traded companies to better disclose the risks posed to their business models by the climate crisis.

The organisation’s statement is available on its website. The deadline to sign up is 28 May.

Last Updated: 21 May 2021