Climate disclosures should be mandatory, investors say

People trust climate data more often if companies are required to report it


Emile Hallez

Retail investors broadly like the idea of the SEC requiring public companies to disclose their climate risk data, according to the results of a recent survey.

Seventy percent of more than 2,500 current investors surveyed in March said they either somewhat or strongly supported the requirement, according to a survey published April 28 by Public Citizen and the Americans for Financial Reform Education Fund. Those groups commissioned the survey, which was conducted by Embold Research.

While 36% of people said they would trust the climate risk data in disclosures made voluntarily by companies — which is the current standard — 58% said they would trust that information if companies were mandated to report, the survey found. Further, 71% indicated they would trust the data if companies made disclosures to the SEC and the information was audited by a third party.

In March, the SEC unveiled a proposed rule that would require most public companies to report emissions data, including Scope 3, with third-party verification eventually being required for Scope 1 and 2 emissions. The agency is currently reviewing public comments and preparing a final version of the rule.

The recent survey data echo the results of a December poll commissioned by Just Capital, Ceres, Public Citizen and SSRS. That report found that 87% of 1,100 Americans surveyed said they think the government should require large companies to disclose their climate risks, with 97% of Democrats and 74% of Republicans agreeing.

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