Nick Grabar is partner at Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary memorandum by Mr. Grabar, David Lopez, Francesca Odell, Lillian Tsu, and Helena Grannis.
We think that moderating the proposal in key respects will—far from weakening it—make it more likely to achieve the Commission’s long-term purposes of eliciting useful and consistent disclosures. Ideally the SEC’s rules would contribute to developing coherent climate disclosure practices around the world—not just for U.S. reporting companies and not just under SEC rules.
With that in mind, a month ago we published a list of points for potential comment. Since then we’ve had a number of interesting conversations with clients and colleagues, as everyone has had a chance to dig into the proposal and to compare it to existing practices. Today we have ten points we commend to your attention. We are focusing on items where the SEC seems to have ventured beyond what investors and other frameworks have called for, or where the SEC seems to have misjudged the challenges of compliance.
A common element among many of the points below is that the SEC’s proposing release states that they were supported by commenters in response to the SEC’s March 2021 request for comment. We would urge the Commission to distinguish between types of commenters. The views of advocates and activists—while they are undoubtedly important—are not of the same kind as the view of investors and their representatives, and they do not bear equally on the Commission’s statutory mandate for the protection of investors.