The SEC's investor advisory committee said Wednesday it supports the agency's proposed rules requiring disclosure of climate and cybersecurity risks and offered recommendations on how to improve them.
The Securities and Exchange Commission unveiled its climate disclosure rule proposal in March, which would require public companies to provide an array of climate-related information in their registration statements and annual reports. The proposal has been met with criticism, including from Republicans on Capitol Hill, who pressed SEC Chairman Gary Gensler on its merits at a Senate hearing last week.
Overall, the committee said it supports the proposed rule amendments. "As representatives of the investor community, we are confident investors will benefit from more consistent, comprehensive and easily located disclosures from registrants on these topics," the committee states in its recommendation.
However, the committee suggested, among other recommendations, that the proposal add a requirement calling for management discussion of climate-related risks and opportunities in their annual 10-K reports, which it said would help better inform investors.
"This requirement would not only enhance and deepen investor understanding of management's views but would also provide a standardized location for issuers to discuss their long-term strategy and goals in a way that would be efficient for investors to consume," the recommendation states.