US SEC chair makes pitch for climate rule to corporate group

By Douglas Gillison and Isla Binnie

WASHINGTON (Reuters) – Establishing rules for U.S. companies to follow when reporting environmental risks would help them avoid the confusion of trying to use foreign frameworks, Gary Gensler, chair of the Securities and Exchange Commission, said on Thursday.

Gensler told an event held by the U.S. Chamber of Commerce that he hoped an eventual rule on reporting climate risks, which was first proposed more than a year ago and received some 16,000 comments, would survive any legal challenges.

“I think for … corporate America, a rule, if we are able to finalise it, it would be best if it’s sustained in court,” Gensler said.

The SEC’s draft rule, released in March 2022, proposed asking listed companies to include data on greenhouse gas emissions and risks like physical damage and disruption from severe weather events in formal regulatory filings.

The rule was originally expected to be finalised earlier this year. Many lawyers and market observers expect it to attract lawsuits.

Other jurisdictions, notably the European Union, are making their own rules, but “they have a different law, and we are not solving for their law”.

“Maybe this is just my pitch to corporate America,” Gensler added.

But after the event, U.S. Chamber of Commerce official Tom Quaadman said, “We remain deeply concerned that the SEC’s proposed rule will impose costs equal to all disclosures companies already make, and, worse, that it significantly underestimates the actual compliance costs for companies.”

In the absence of federal rules, the state of California has written its own laws on how companies report their climate risks, which was met by a veto request from the local division of the U.S. Chamber.