Ceres comments on SEC decision to withdraw support for climate risk disclosure rule

In response to the recent decision made by the U.S. Securities and Exchange Commission (SEC) to withdraw its defense of the climate risk disclosure rule, Ceres, a nonprofit advocacy organization, expressed disappointment. Steven M. Rothstein, the Managing Director of the Ceres Accelerator for Sustainable Capital Markets, emphasized the critical role of the SEC in safeguarding investors’ interests. He highlighted the consistent demand from investors for clear, comprehensive, and actionable information regarding companies’ exposure to climate-related financial risks over the past two decades. The escalating impact of climate change, exemplified by devastating events like the wildfires in Los Angeles, has underscored the urgent need for transparency in addressing these risks.

Investors, managing a substantial $50 trillion in assets, have demonstrated strong support for the rule established in March 2024 that aimed to enhance disclosure practices related to climate risk. The withdrawal of the SEC’s defense of this rule represents a significant setback in providing investors and other stakeholders with vital information to effectively manage climate-related financial risks. This decision not only hampers efforts to address the growing challenges posed by climate change but also hinders progress towards a more sustainable and resilient financial system.

Ceres, with its mission to accelerate the transition to a cleaner, more just, and sustainable world, plays a pivotal role in advocating for sustainable practices in capital markets. The Ceres Accelerator for Sustainable Capital Markets, operating as a dedicated center within Ceres, focuses on driving improvements in the policies and practices governing capital markets. By engaging with federal and state regulators, financial institutions, investors, and corporate boards, the accelerator strives to raise awareness of climate risk as a systemic financial risk and promote necessary actions to address it.

Through its advocacy and collaborative initiatives, Ceres aims to empower market participants to make informed decisions that account for climate-related risks, ultimately contributing to a more resilient and sustainable financial system. By supporting greater transparency and accountability in disclosing climate risk, Ceres seeks to enable investors to navigate the complexities of climate change and its implications on financial markets effectively.

In light of the SEC’s decision to retract its defense of the climate risk disclosure rule, Ceres remains committed to its advocacy efforts to advance sustainable capital markets. Despite this setback, Ceres continues to work towards fostering a financial system that integrates climate risk considerations into decision-making processes, thereby safeguarding investors and promoting long-term stability and resilience.