CONTACT: Brigid Richelieu
(202) 660-2569
brichelieu@fsforum.com
Nation’s Largest Banks Support Providing Material, Decision-Useful Information to Investors
Washington, D.C. – The Securities and Exchange Commission (SEC) should revise proposed climate disclosure requirements to ensure they provide investors with material, decision-useful information on climate-related risks, the Financial Services Forum said Thursday.
The Forum responded to a March proposal by the SEC that significantly expands the types and amount of information required of all public companies regarding climate-related risks. “The U.S. GSIBs believe in providing investors with decision-useful disclosures regarding climate-related financial risks and already voluntarily disclose much of the information investors have requested, specifically as it relates to their governance, strategy, risk management, and metrics and targets,”Forum President and CEO Kevin Fromer said. “We believe key elements of the SEC’s proposal should be more qualitative and principles-based, rooted in traditional materiality, and deferential to prudential requirements for banks. The rule should better recognize the current limitations of data and methodologies needed to reliably provide much of the information sought. The SEC should also substantially delay the effective dates for compliance given the complexity and evolving nature of measuring the financial impacts of climate-related activities and events, as well as greenhouse gas emissions.”
The Forum’s letter offered several key observations and recommendations regarding the rule including the following:
- The Forum encouraged the SEC to remove or reduce its requirement to disclose the impact of climate-related risks on financial statements and to use a traditional materiality threshold for the disclosure of any financial impacts that are required.
- The Forum recommended requiring disclosure of only the explicit Scope 3 emissions included in material, publicly announced targets.
- The Forum urged the SEC to defer to prudential regulators on climate scenario analysis requirements for banks and to require only summary disclosures related to the use of climate scenarios.
- The Forum recommended that the SEC delay the effective date of any mandates to at least 2 years after finalization of its rule, with more time provided for certain requirements and new registrants.
The Forum’s full comments to the SEC can be found here.
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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.
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