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Nicholas Institute for Environmental Policy Solutions
June 2021

SEC Climate Risk Disclosure Comment Letter: Executive Summary

Climate Risk Disclosure Lab Letter

This letter was written by the Climate Risk Disclosure Lab (of which the Nicholas Institute is a partner) and submitted to the Securities and Exchange Commission in response to their request for answers to 15 questions “with an eye toward facilitating the disclosure of consistent, comparable, and reliable information on climate change.”

The Lab held a series of workshops to formulate detailed responses to each of the SEC's questions. The Lab felt it was important to weigh in on each question, given the time and effort SEC leadership and staff clearly put into asking them in the first place. Recognizing the necessity of immediate action, the Letter discusses actions the SEC can take now, under its existing authority, to develop a mandatory climate risk disclosure regime. However, we also recognize that policymaking is a continuous process, so our letter contains recommendations for the SEC to purse in the long-term, once an initial climate disclosure rule is in place.

The Lab is encouraged by the emphasis and attention given by the SEC to climate risk disclosure. This issue is one that needs to be addressed to protect investors, maintain fair, orderly, and efficient markets, and continue to facilitate long-term capital formation. Clearly, it falls squarely within the SEC’s mandate. In forthcoming reports by the Lab, we seek to further explore these matters by engaging with experts to better understand and answer the questions posed by the SEC, along with others.