June 3, 2021

Comments on Mandatory Climate Disclosure: TCFD & SASB Get a Nod

With about 2 weeks to go before the expiration of the time frame that the SEC had set to collect public input on the possibility of climate change disclosure rules, the Commission has held at least a couple dozen meetings with corporate leaders and trade organizations. In connection with those meetings, companies including Apple and Salesforce have spoken out in support of rulemaking. Most seem to be falling in line with support for principles-based disclosure.

Uber is one of the only companies so far that has taken the extra step of submitting a comment letter. In it, the ride-sharing company says it supports using existing principles-based frameworks to harmonize climate disclosures. Here’s an excerpt:

We support a climate disclosure framework that incorporates TCFD or SASB standards and is generally principles-based, so as to be sufficiently flexible to adapt to market and scientific developments and to accommodate the needs of public companies in various industries and at differing stages in their life cycles. We believe this approach would build upon years of thought leadership and stakeholder engagement by TCFD and SASB whose recommendations and standards are already utilized as a basis for voluntary reporting on climate change by many public companies…

…Incorporating the TCFD or SASB frameworks into a new,comprehensive and harmonized climate disclosure framework, promulgated by the Commission, will facilitate faster and more widespread adoption which would ultimately serve the best interests of investors.

In addition, we encourage the Commission to consider requiring that companies perform a company-specific materiality assessment to identify the ESG issues most relevant to their businesses. We believe that the most useful ESG disclosures will be grounded in the specific issues that are relevant to the particular company,as opposed to generic ESG disclosures that may or may not apply in a company’s individual circumstances.

Not everyone supports mandatory disclosure. I blogged about a First Amendment threat by West Virginia’s AG. The US Chamber of Commerce seems to be opposed to any legislation or Commission rules that would require ESG disclosures, and this letter argues that extra disclosure would have a disproportionate effect on smaller companies.

Liz Dunshee