Open Letter to the SEC: Proposed Rule on Climate-Related Disclosures


The U.S. Securities and Exchange Commission took a historic step on March 2022 by proposing a rule for climate-related disclosures. If passed, companies would need to be more transparent around their climate emissions and risks, which both enables companies to better manage risks as well as allows investors to make more informed decisions.

Related links: (scroll to March 21, 2022)

What we submitted for Climate Positive Consulting is below. If you see this before May 20, feel free to use for your own submission! And if you would make additions or adjustments, please add a comment.


To the SEC Commissioners and staff:

Thank you for the opportunity to comment on proposed rule S7-10-22: The Enhancement and Standardization of Climate-Related Disclosures for Investors. The proposed rule includes disclosure guidelines for:

  • climate-related risks (qualitative)
  • greenhouse gas (GHG) emissions (quantitative)

I submit these comments as the founder of Climate Positive Consulting (, which analyzes business carbon footprint and crafts climate strategy, the end goal of which is to enable companies to make informed decisions around GHG reduction goals and actions.

As with other significant aspects of a company, environmental and social considerations logically fall under the concept of materiality and the duty to disclose. Those considerations correctly include GHG emissions as a critical aspect of a company’s impacts on communities, the U.S. economy and the air, water, food and other ecological systems on which we all depend.

Please do add a new subpart to Regulation S-K and a new article to Regulation S-X to require registrants to disclose climate-related information.

Disclosure is clearly important for GHG. ESG-oriented investors have been asking companies for GHG data for several years, and in some cases, decades, in order to make informed investment decisions. CDP, as an international reporting platform used by tens of thousands of companies, confirms the strength of the voluntary GHG reporting market.

Given successful voluntary efforts, I am pleased to see SEC is leveraging TCFD and GHG Protocol among others. It’s critical to recognize the many companies that are already disclosing and crediting their work to make sure there’s not duplicative effort with new rules. Please continue to harmonize any new Regulation S-K governance, risk and metrics disclosures with reporting integration efforts between CDP, TCFD, Values Reporting Foundation and others. Your choice to follow TCFD vs. other standards (CDP, etc.) is less of an issue, given the integration that is ongoing.

Beyond voluntary efforts, SEC has a real role to play in further standardization. Within voluntary efforts, there’s yet significant flexibility in reporting decisions and assumptions and an intelligently-crafted rule will help ensure greater comparability for investors and civil society groups.

Our core work is in GHG accounting as the basis for crafting business GHG reduction strategy. Our company and its predecessor have advanced this work since 2009. It is critical the proposed rule include:

  • Disclosure requirements for Scope 1, Scope 2 and Scope 3 emissions as defined by GHG Protocol. Scope 3 is almost always material for our clients. We do not have a problem with the compliance date schedule as articulated in the March 21, 2022 proposed rule, but Scope 3 should ultimately be included
  • Separate disclosure of carbon offsets from emissions. Reviewers should be able to easily see company carbon footprint before purchase of offsets as well as the impact those offset make. Your reasoning is sound that “a registrant that relies on carbon offsets or RECs to meet its goals might incur lower expenses in the short term but could expect to continue to incur the expense of purchasing offsets or RECs over the long term”, which highlights the need for disclosure of the financial impact of that strategy.
  • Disclosure of an internal price on carbon. Smart companies should be integrating price on carbon as a practical matter. It’s a relevant disclosure for informed investment.

We are not vested in scenario analysis as a tool, and believe it’s acceptable for SEC to exclude scenario analysis as a requirement. The goal for investors and companies must be to drive their emissions down, not necessarily expend resources to gauge whether that successful reduction means their plans have them at 1.6 deg C vs. 2.2. The Science Based Targets Initiative has translated degree of warming scenarios into GHG reduction per year targets for compliance with a 1.5 deg warming scenario. Those %/year targets are more actionable than warming scenarios. SEC should require disclosures around whether a company has a science-based target to address the scenario concern.

Please proceed to require climate-related disclosures for SEC registrants, including quantified Scope 1, 2, and 3 emissions. We wish you much success in enabling investors to make informed decisions around climate impacts and business viability.