An SEC rule proposal for companies to disclose climate-related risk is likely to come out this year, Commissioner Allison Herren Lee said Wednesday during a US SIF forum.
"We have received thousands of letters from a diverse group of commenters" during a comment period that just ended, she said. "I do expect a rule proposal on climate disclosure to be the next step."
There will be another comment period once a rule is proposed.
"At every step along the way the SEC has and will continue to engage with market participants ... We need to move swiftly and we need to craft a rule that will work," she said. "We need to find the right balance between principles and metrics," and to give companies enough time to adjust to any new rules.
Support for disclosure standards on climate risk is coming from a range of interests filing comment letters. In its comment letter, the Managed Funds Association encouraged the SEC to establish a framework for climate-related disclosures, saying that "investors are ill-served when there is no accountability for the legitimacy of the information being provided to the marketplace." An SEC framework should "be the foundation upon which all other applications of climate-related disclosures are built," the MFA letter said.
Ms. Lee said that any discussion of new rules has to look beyond climate. "Top of mind for me is how do we ensure that we don't lose sight of other ESG topics? she said, citing equally pressing ESG issues such as human capital, board and workforce diversity, and inclusion and disclosure of political spending activity.
"Investors have made it clear that they have a much broader horizon they are interested in," Ms. Lee said.