Gensler Delivers Remarks on Climate Risk Disclosures; Climate Funds’ Assets Rising

In remarks delivered at the Ceres Investor Briefing, SEC Chair Gary Gensler focused on the recent SEC rule proposal to mandate climate-risk disclosures by public companies. His remarks focused on the history of disclosure, ensuring investors have access to material information, and standardizing climate-related reporting mechanisms. He noted the SEC “has a role to play in terms of bringing some standardization to the conversation happening between issuers and investors, particularly when it comes to disclosures that are material to investors.” He focused a portion of his speech on the two international frameworks, the Task Force on Climate-related Financial Disclosures (TCFD) and the Greenhouse Gas Protocol (GHG), that the Commission used as a model, noting that “70 percent of companies in the Russell 1000 Index published sustainability reports in 2020 using various third-party standards, which include information about climate risks.” His remarks noted that “there are some costs to this,” however, he believes that consistency among disclosures is important for investor decision-making. Meanwhile, a report from Morningstar examines the global landscape of climate-focused funds, maps out the products that fit into each category, and demonstrates the growth in climate funds across different markets. Morningstar reported that in 2021, U.S. climate funds enjoyed nearly $13 billion in net flows, a 43% increase over 2020's record and 18 times greater than that seen five years ago. Clean Energy/Tech funds were the winners, attracting more than half of the total for the year ($7.2 billion).