The IIF broadly welcomes the SEC’s initiative under the proposed rule to introduce a benchmark standard for disclosure of climate-related information, with the aim of providing consistent, comparable, and reliable information that is relevant for investors’ decision-making.

The IIF supports mandatory requirements for disclosures of climate-related information by issuers, where financially material, to improve comparability and consistency of climate-related information and data in financial markets. Clear, comprehensive, and well-aligned  requirements for climate-related disclosures serve investors and contribute to the reliability and robustness of data on climate-related risks, helping address well-known data gaps. 

However, there are a number of significant challenges and concerns with aspects of the proposed rule that may warrant reconsideration by the SEC before the rule is finalized. These include definitions and expectations pertaining to assessment of materiality, the need to tailor  certain financial statement metric disclosures, the level of prescriptiveness of certain requirements pertaining to governance and risk management, the scope of safe harbor provisions, and evolving expectations regarding disclosure of transition plans and scenario  analysis (where practices are still at an early stage).

As such, we propose modifications to certain aspects of the proposed rule, with the aim of supporting  effective implementation by both corporates and financial institutions and enhancing the relevance of disclosed information for investors.