Posted on Tuesday, November 10, 2020

Keynote remarks from Securities and Exchange Commissioner Allison Herren Lee at PLI’s 52nd Annual Institute on Securities Regulation on November 5, addressed “Playing the Long Game: The Intersection of Climate Change Risk and Financial Regulation“.  Commissioner Lee noted in her talk:

… investors, asset managers responsible for trillions in investments, issuers, lenders, credit rating agencies, analysts, index providers, stock exchanges and other financial market participants have embraced sustainability factors and metrics as significant drivers in decision-making, capital allocation, pricing and value assessments. The bottom line is that businesses now actively compete for capital based on ESG performance, and that competition needs to be open, fair, and transparent.

This requires uniform, consistent, and reliable disclosure. I’ve spoken before about the need for this disclosure from public companies. As I’ve mentioned in several contexts, that is an effort that has progressed a fair amount through private ordering, but now needs some level of regulatory involvement to bring consensus, standardization, comparability, and reliability…

The SEC should work with market participants toward a disclosure regime specifically tailored to ensure that financial institutions produce standardized, comparable, and reliable disclosure of their exposure to climate risks…”

Read the speech.