Senator Elizabeth Warren (D-Mass.) on Wednesday reintroduced the Climate Risk Disclosure Act, legislation that would require public companies to disclose their exposure to climate-related risks.
Originally introduced in 2018, the bill, if passed, is intended “to help investors appropriately assess climate-related risks, accelerate the transition from fossil fuels to cleaner and more efficient energy sources, and reduce the risks of both environmental and financial catastrophe,” Warren, a presidential candidate, said in a statement.
The Climate Risk Disclosure Act of 2019 would direct the Securities and Exchange Commission, in consultation with climate experts at other federal agencies, to issue rules within one year that require public companies to disclose:
- direct and indirect greenhouse gas emissions;
- the total amount of fossil fuel-related assets owned or managed;
- how valuation would be affected if climate change continues at its current pace or if policymakers successfully restrict greenhouse gas emissions to meet the 1.5 degrees Celsius goal; and
- risk management strategies related to physical risks and transition risks posed by the climate crisis.
The bill is cosponsored by Senators Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-R.I.), Chris Van Hollen (D-Md.), Amy Klobuchar (D-Minn.), Kirsten Gillibrand (D-N.Y.), Michael Bennet (D-Colo.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Edward J. Markey (D-Mass.), Jeff Merkley (D-Ore.), Kamala Harris (D-Calif.), Tina Smith (D-Minn.), Dianne Feinstein (D-Calif.), Tom Carper (D-Del.), and Senate Minority Leader Chuck Schumer (D-N.Y.).
U.S. Representative Sean Casten (D-Ill.) introduced the House companion legislation, along with U.S. Representatives Matthew Cartwright (D-Penn.) and Alexandria Ocasio-Cortez (D-N.Y.).
“Publicly traded companies have an obligation to their shareholders to disclose all material risk, and climate change is no longer a theoretical problem to be contended with sometime in the future. It is here, and it is costing companies money. That cost must be analyzed and disclosed,” Schatz, chairman of the Senate’s Special Committee on the Climate Crisis, said in a statement.
“We can minimize the American economy’s exposure to the worsening effects of climate change by making sure companies disclose the real risks they face,” Whitehouse added. “Warnings abound right now. A lot of financial downside across the economy will be prevented if investors start demanding a faster transition to clean energy and preparation for climate change.”