SEC Mulling Corporate Reporting on Net-Zero Goals, Chair Says

The SEC is considering disclosure requirements for companies that pledge to reduce their greenhouse gas emissions and meet goals to fight climate change, agency Chairman Gary Gensler said.

The Securities and Exchange Commission rules potentially would cover companies with “forward-looking climate commitments” and major operations in countries with mandated climate targets, Gensler said in remarks prepared for City & Financial Global’s London City Week event Wednesday.

The comments provide the most detailed look yet into Gensler’s plans for new climate disclosures. The SEC is planning to release a proposal this fall.

Companies are increasingly vowing to reduce their emissions to net zero in the coming years. The UK, France, and other countries also have created net-zero targets.

But the SEC doesn’t specifically require companies to discuss their net-zero goals, potentially leaving investors unable to evaluate a company’s work on climate change.

“Investors representing literally tens of trillions of dollars of assets under management are looking for consistent, comparable, decision-useful information to determine whether to invest, sell, or make a proxy vote one way or another,” Gensler said.

The agency is looking at mandating corporate reporting on greenhouse gas emissions, and strategy, governance, and management surrounding climate risk, as part of its rulemaking, Gensler said.

The commission also is reviewing how funds promote green, sustainable, or environmental, social, and governance investments, and what information they use to support those claims, he said.