Thursday, September 22, 2022
The SEC's investor advisory committee recently released a draft climate disclosure recommendation. The recommendation generally supported the SEC's proposal with some suggestions changes. The recommendation runs just 6 pages but makes a number of thoughtful points.
It calls for eliminating a proposed requirement for the board to disclose the climate expertise of its members in favor of a requirement for management to discuss climate-related risks and opportunities. This strikes me as a better approach. Investors want to have a sense about how the corporation will respond to climate change. So long as the board can get qualified expert advice, it doesn't need to have members with direct climate-risk expertise--something that will be difficult to define anyway.