The Securities and Exchange Commission (SEC) will soon adopt a rule requiring all publicly traded companies to disclose just how much greenhouse gas they emit while doing business, the Washington Post reports. The rule, which is likely to be announced on Monday, will include climate risk disclosure—something that SEC Chair Gary Gensler has previously discussed adopting and that President Biden touted as a goal during his 2020 campaign. For Gensler, the goal of more standardized regulations regarding climate change has been at least months in the making. In a speech last July, Gensler said that investors were clamoring for climate risk regulations in order to make better-informed decisions.
“Investors increasingly want to understand the climate risks of the companies whose stock they own or might buy,” Gensler said before the Principles for Responsible Investment “Climate and Global Financial Markets” Webinar. “Large and small investors, representing literally tens of trillions of dollars, are looking for this information to determine whether to invest, sell, or make a voting decision one way or another.”
Gensler has previously noted that, because the SEC lacked regulations for standardized climate risk disclosure and greenhouse gas emissions, little oversight or consistency existed when it came to publicly traded companies self-reporting. That lack of transparency makes it difficult to truly measure just how companies are contributing to the climate crisis and follows a pattern of companies essentially lying by omission when they do release any climate-related data. The Washington Post cites Tesla’s penchant for only releasing emission information for the Model 3, which accounts for the majority of the cars produced but fails to include emissions data for more than 24,000 additional vehicles, like the Model S and Model X. With the adoption of climate-focused regulations, the U.S. will join the likes of the European Union, the U.K., and Japan looking to adopt climate disclosures for businesses. The SEC regulations are, of course, expected to face pushback.
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