June 10, 2021
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090
Re: Public Input on Climate Change Disclosures
Dear Ms. Countryman,
We write in response to Commissioner Lee’s March 15, 2021 public statement requesting input on climate change disclosures (the “Request”).1 The Asset Management Group of the Securities Industry and Financial Markets Association (“SIFMA AMG”) 2 appreciates the opportunity to share our members’ perspectives on some of the issues we believe are important for the Securities and Exchange Commission (the “SEC”) to consider as it evaluates proposing climate change-related or similar disclosure rules.3 In an effort to avoid duplication and repetition, this letter addresses the main thematic points that will be important for facilitating the disclosure of consistent, clear, intelligible, comparable and accurate information on climate change that is useful to investors. Many of SIFMA AMG’s recommendations respond to more than one of the questions presented in the Request, which we have noted below.
SIFMA AMG welcomes the SEC’s interest in facilitating the disclosure of useful information on climate change, and believes the SEC’s participation in the ongoing global dialogue on this matter is critical to the efficient functioning of global capital markets. Creating enduring rules that meet investor needs but that are not unduly burdensome on registrants will require close coordination between the SEC and multiple domestic and international regulatory authorities, standard setters, and other stakeholders, as well as a careful balancing of potentially competing priorities. While it will take significant work, the SEC, and the United States, can and should be at the forefront of establishing climate-related disclosure rules and guidelines that strike this balance.4
We note that this letter focuses primarily on climate change-related disclosures. SIFMA AMG believes it is prudent for the SEC to focus its efforts on climate change-related disclosure before potentially addressing other ESG-related disclosures.5 Understanding how a company is analyzing and addressing climate-related risks and opportunities is material to investment and voting decisions for a large number of investors.
1 See Then-Acting Chair Allison Herren Lee, Public Input Welcomed on Climate Change Disclosures, U.S. SECURITIES AND EXCHANGE COMMISSION (March 15, 2021), https://www.sec.gov/news/public-statement/leeclimate-change-disclosures.
2 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds
and private equity funds. For more information, visit http://www.sifma.org/amg.
3 This letter is being submitted on behalf of SIFMA’s Asset Management Group. SIFMA’s broker-dealer and investment bank members are submitting a separate response. SIFMA AMG appreciates the assistance of Michael Littenberg, Alexander Simkin, and Dominique Rioux of Ropes & Gray LLP in the preparation of this response.