The Progressive


A project of Common Dreams

For Immediate Release

Ashley Siefert Nunes at UCS,

New SEC Rule Vital to Transparent Accounting of Mounting Climate Risks to Businesses, Protecting Investors

Statement by Kathy Mulvey at the Union of Concerned Scientists


Scientists, investors, regulators and businesses have long agreed that shocks inflicted by climate change can painfully disrupt financial markets. The U.S. Security and Exchange Commission (SEC) today announced a new draft rule that will compel publicly traded companies to assess and report on how climate change will affect their bottom lines and, by extension, the pocketbooks of investors and the public.

The proposed rule would require companies to disclose the amount of heat-trapping emissions their businesses produce, detail how climate impacts and the clean energy transition might affect their businesses, and provide their plans for meeting their carbon emissions reduction targets. By standardizing reporting requirements, the rule will save companies time and money while giving investors additional insight into how companies are managing risk.

The Union of Concerned Scientists (UCS) has long been urging the SEC to require comprehensive climate risk disclosure by companies to better protect U.S. financial systems and people's investments, while also sending a clear market signal that businesses must orient toward a clean, climate-resilient future. Below is a statement by Kathy Mulvey, accountability campaign director for the Climate and Energy Program at UCS.

"This new SEC rule is an important step toward recognizing that rising heat-trapping emissions and rapidly worsening climate impacts pose a significant risk to our financial and economic system and that accounting for those risks can help businesses and shareholders to proactively safeguard their investments. The SEC has a duty to protect the public against these mounting risks by compelling companies to disclose information important to investors, and this rule falls squarely within the agency's mandate.

"Strong provisions for disclosure of Scope 3 emissions, which include those resulting from consumption of a company's products, will be particularly important as they account for 80-90% of the oil and gas sector's total emissions. The final rule must ensure that investors can accurately assess and compare how fossil fuel companies are addressing their outsized responsibility for the climate crisis and preparing for the clean energy transition.

"From the 2008 financial crisis to the recent economic downturn related to the COVID-19 pandemic, economic crises touch everyone from Wall Street titans to pensioners to hourly wage workers, but--like environmental crises--often hit households of color and low-income households the hardest. Standardizing disclosure requirements will also help businesses meet the demands of international capital markets and ensure investors have consistent and comparable data to make fully informed decisions and hold corporations accountable for their response to climate change. Protecting our financial system from climate-induced risk protects us all."

UCS has researched and educated the public about the dangers of climate change for decades. It also works toward building resilience to climate change at every level of government, as well as the U.S. financial system. UCS intends to file a detailed comment in response to the SEC's draft rule. Please contact UCS Climate and Energy Media Manager Ashley Siefert Nunes to talk to Mulvey or another UCS expert.

Additional information on work by UCS to strengthen corporate climate disclosure is available below:

  • A UCS comment responding to a 2021 SEC request for public input on corporate climate disclosure.
  • A 2021 sign-on letter led by UCS in support of the Climate Risk Disclosure Act.
  • A UCS statement on the 2020 Commodity Futures Trading Commission report "Managing Climate Risk in the Financial System."
  • Testimony by UCS before the House Financial Services Committee and a related blog.
  • A UCS blog on how climate disclosure helps everyone.
  • A UCS comment to the Federal Housing Finance Agency on the risks climate change and extreme weather poses to the federally-backed housing finance market.

The Union of Concerned Scientists is the leading science-based nonprofit working for a healthy environment and a safer world. UCS combines independent scientific research and citizen action to develop innovative, practical solutions and to secure responsible changes in government policy, corporate practices, and consumer choices.