Legislation aimed at helping investors assess climate-related risks was introduced Monday by Sen. Elizabeth Warren, D-Mass., and seven Democratic senators.
If passed, it would require the Securities and Exchange Commission to issue within one year rules requiring every public company to disclose direct and indirect greenhouse gas emissions, the total amount of fossil-fuel related assets that it owns or manages, how valuation would be affected and risk management strategies. Disclosure requirements would be tailored to different industries.
Ms. Warren said in a statement that climate change "will have an enormous effect on the value of company assets. Investors need more information about climate-related risks so they can make the right decisions with their money ... Climate change can be an economic opportunity if we act boldly and decisively."
A support letter from investor and environmental groups said, "By ensuring that private capital can appropriately assess climate-related risks, the bill will help accelerate the transition away from fossil fuels to cleaner and more efficient energy sources and reduce the risk of financial instability."
New York state Comptroller Thomas P. DiNapoli, sole trustee of the $209.2 billion New York State Common Retirement Fund, Albany, echoed his support in a statement. "Global investors are aggressively addressing climate risk, but we face a severe lack of information from our portfolio companies on how they expect to perform in the changing world," he said.
Better information would help investors see which companies are preparing to succeed in a low-carbon economy, help spur innovation and encourage more companies to engage in building the growing low-carbon economy, Mr. DiNapoli said.
