The Securities and Exchange Commission (SEC) proposed a rule in May of 2022 that would require public companies to disclose certain climate-related risks in their registration statements and annual reports. Despite vocal opposition from some industry and conservative groups, including arguments from Republican attorneys general claiming that the SEC’s disclosure rule would violate the First Amendment, strong evidence supports the investor need for this kind of information.

On June 17, 2022, on behalf of leading First Amendment and securities disclosure law experts, we submitted a comment in support of this rule. The letter was spearheaded by Rebecca Tushnet, Frank Stanton Professor of First Amendment, Harvard Law School. She was joined by Caroline Mala Corbin, Professor of Law & Dean’s Distinguished Scholar, University of Miami School of Law; Ellen P. Goodman, Associate Dean of Strategic Initiatives & Special Projects, Professor of Law, Rutgers Law School; Sarah C. Haan, Professor of Law, Washington & Lee University School of Law; Sarah E. Light, Associate Professor of Legal Studies & Business Ethics, University of Pennsylvania; and David C. Vladeck, A.B. Chettle, Jr. Professor of Law, Georgetown Law School.

Growing evidence shows that companies may face climate-related risks like catastrophic weather events, supply chain disruptions, changing demand, and regulatory and transition costs as the world uses fewer fossil fuels. Investors managing hundreds of trillions of dollars have been pressing for consistent information about climate risks and how companies have prepared for them. The consequences of not having access to this information are high: many experts believe that climate risks are not currently being accurately and consistently incorporated into asset prices. The letter notes that many publicly-traded companies – including Adobe, Alphabet, Chevron, General Motors, and Lockheed Martin – already have a practice of making similar disclosures or extensively discussing anticipated climate-related risks in their annual reports. And many public companies and their representatives have admitted that climate transitions could affect their bottom line.

Read the comment here.