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SEC Chairman Gensler Re-Affirms Importance of Climate Disclosures in Senate Testimony

Today, SEC Chairman Gensler testified before the Senate Committee on Banking, Housing, and Urban Affairs.  His remarks were wide-ranging, and touched upon a number of different SEC priorities--but Chairman Gensler made sure to once again emphasize the critical importance of the SEC's proposed climate disclosures.

Specifically, Chairman Gensler stated that "investors are making investment decisions based upon factors that include the risks and opportunities related to climate."  He further noted that "hundreds of companies are already disclosing such information, pursuant to disparate frameworks, in a manner that lacks consistency and reliability."  Based upon these circumstances--the expressed desire for climate information and inconsistent disclosure frameworks--Gensler proclaimed that "the SEC [therefore] has issued proposals to help bring investors greater consistency, comparability, and decision-usefulness to such disclosures." 

This testimony indicates that, despite public criticism and the more than 14,000 comments received by the SEC (many of which were critical), Chairman Gensler intends to maintain the SEC's current posture on the proposed climate disclosures--namely, that these climate disclosures are not only necessary but are encompassed within the SEC's core mission of providing relevant information to investors.  It seems likely that the proposed SEC climate disclosures will be finalized and issued in the fourth quarter of 2022--and that the SEC will be prepared for the inevitable legal challenges. 

Over the decades, we have updated our rule set to elicit disclosures of information relevant to investors’ decisions. Increasingly, over the last number of years, investors are making investment decisions based upon factors that include the risks and opportunities related to climate and cybersecurity. Today, climate-related factors and risks as well as cybersecurity risks both can affect a company’s bottom line and its future, and therefore an investor’s decision to buy, hold or sell a security or how to vote a proxy. Today, investors are already making decisions based upon information about climate and cyber risks. Hundreds of companies are already disclosing such information, pursuant to disparate frameworks, in a manner that lacks consistency and reliability. Thus, the SEC has issued proposals to help bring investors greater consistency, comparability, and decision-usefulness to such disclosures . . . .

https://www.sec.gov/news/testimony/gensler-testimony-housing-urban-affairs-091522

©1994-2022 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XII, Number 258
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About this Author

Jacob Hupart Commercial Attorney Litigation Mintz Levin Cohn Ferris Glovsky and Popeo PC
Member

Jacob has a multifaceted litigation practice that encompasses complex commercial litigation, including cases involving securities, employment, and environmental claims, as well as class action litigation, white-collar criminal defense, and regulatory investigations. He has extensive experience handling all phases of litigation before federal and state courts, managing discovery, and conducting settlement negotiations. Jacob has represented clients in a variety of industries, including financial services, energy, education, and the media.

Prior to joining Mintz, he was an associate...

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