What do the comments on the SEC’s climate disclosure request look like?

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– 6000 comments have been submitted to the SEC about possible climate disclosure rulemaking, 300 of which are from institutional commentators.
– Analysis of the comments reveals a lot of people want industry-specific standards; want to draw from an existing framework; and want quantifiable data (as compared to qualitative disclosure). Half want mandated disclosure of Scope 3 emissions.

Thanks to this fantastic memo from Davis Polk, we have a pretty good summary of what the comments on the SEC’s climate disclosure request look like. There have been over 6000 comment letters submitted, most of them consisting of form letters.

Davis Polk provides some nice pie charts displaying the type of commentator – and then provides analysis of the input made on these six key issues drawn from the 300 comment letters submitted by institutional commentators:

1. Does the SEC have authority to mandate climate disclosures, and would doing so survive the cost-benefit analysis required for rulemaking?
2. Given a perceived desire for both meaningful and comparable climate disclosures, which types of disclosure standards (e.g., general or industry-specific standards, a single global standard or multiple standards around the world and a standard drawing on existing third-party frameworks or a novel framework) should the SEC use for any mandatory climate disclosure regime?
3. If the SEC mandates climate disclosures, what information should the SEC require to be disclosed?
4. Should the SEC provide protection from liability, whether through a safe harbor, having climate disclosures be furnished rather than filed or by requiring disclosures on a specialized form outside of 10‑Ks and 10-Qs?
5. Should climate disclosures be subject to the same level of rigor as other types of SEC disclosures, such as financial disclosures, by imposing requirements for audit or assurance or internal controls?
6. If the SEC creates a new disclosure mandate, should its scope include not only public companies but also private companies and not only climate disclosures but also ESG disclosures more broadly?

For me, the highlights are:

1. More people than not think the SEC has the authority to mandate climate disclosures.
2. A lot of people want industry-specific standards.
3. A lot of people want to draw from an existing framework.
4. More people are mixed about having a single global standard than I expected.
5. A lot of people want quantifiable data, as compared to qualitative disclosure.
6. Half want mandated disclosure of Scope 3 emissions. Guess I’m burying the lead here.
7. A lot of people want safe harbor protection from liability.
8. A lot of people think internal controls should cover climate reporting (but not quite as many want an assurance requirement – yet more than half do).
9. There’s a real split about whether the SEC’s mandate should apply to private companies.
10. At the end, Davis Polk summarizes 30 individual comment letters, representative of the various stakeholder views.