Americans for Financial Reform announced that it has amassed 16,658 signatures from among its supporters for a petition calling on the SEC to include mandatory Scope 3 climate risk disclosures in the agency’s anticipated climate risk proposal. A separate voluntary AFR survey also asked signers of the petition if they are investors and AFR reported that of the 3,232 surveyed, 2,547 or 78.8 percent, identified themselves as investors. Many of the signers also provided brief comments.
Significantly, AFR’s petition would appear to limit its request to “large companies and financial institutions.” Said AFR’s petition: “Investors, consumers, and other market participants need high quality, comparable, and credible figures on companies’ and banks’ carbon pollution, in order to respond to the growing risk of climate change and assess whether companies have long term sustainable business models.”
Scope 3 disclosure. Scope 3 disclosures are disclosures of climate risks that are less directly associated with a particular company’s carbon footprint. The Sustainability Accounting Standards Board (SASB), for example, has defined Scope 3 greenhouse gas emissions as follows: “Indirect GHG emissions are those emitted from sources not owned or controlled by the disclosing entity, but that are emitted as a consequence of the activities of the reporting entity.” The Task Force on Climate-Related Financial Disclosures, via a footnote in its recommendations, defined Scope 3 GHG emissions thus: “Scope 3 emissions are all indirect emissions that occur in the value chain of the reporting company, including both upstream and downstream emissions” (See Final Report: Recommendations of the Task Force on Climate-Related Financial Disclosures, June 2017, n. 55) the specific TCFD disclosure recommendation has been updated but the Scope 3 definition remains relevant).
Former SEC officials speaking on panels at the 49th Annual Securities Regulation Institute hosted by the Northwestern University Pritzker School of Law in January 2022 offered some cautionary notes about Scope 3 disclosures. Bill Hinman, former Director of the SEC’s Division of Corporation Finance, for example, suggested that the SEC will need to consider company resources and smaller company exemptions. Mary Jo White, Former SEC Chair, suggested that Scope 3 disclosures could be highly complex and potentially costly for companies to comply with.
At his Senate confirmation hearing a year ago, in reply to a question about ESG disclosure more generally, then-SEC Chair nominee Gary Gensler said that the investor community gets to decide if an item is material in the total mix of information. Gensler said the SEC could provide consistency and comparability to ESG matters. Since becoming chair, the Gensler-led SEC has steadily increased its focus on climate risk disclosures, including by issuing a sample staff comment letter, potions of which may have been sent to companies with the responses potentially influencing the drafting of the SEC’s expected climate risk disclosure proposal. Before Gensler was confirmed, then-Acting SEC Chair Allison Herren Lee sought public comment on climate disclosure, including Scope 1, 2, and 3 disclosures.
In their own words. AFR’s petition to the SEC includes an appendix consisting of a table logging each of the signers to the petition. Although AFR redacted the names of the signers, each line in the table indicates the state where signer resides and, in some instances, also indicates whether the signer is an investor and what type of investor the signer is (e.g., IRA, pension, 401(k), bonds, stocks). Moreover, it appears that some singers added comments to their signature, which also have been captured in the table provided by AFR. The comments, when copied and pasted into a separate file, often expand beyond what is visible in the table. Some comments appear to have been cut off, perhaps by a character limit, but overall they range from the earnest, to the angry, to the shocked, to the vulgar, and at least one references the signer-songwriter Joni Mitchell.
The following discussion attempts to sample these comments. The comments have been taken verbatim, as best as possible given the formatting of AFR’s table. A noticeable number of comments (about half a dozen of them) took the form of “Wall Street should not be able to hide its climate destruction.” The comments noted below are cited in no particular order. Only potentially vulgar comments have been edited.
Disclosure-themed comments:
- 3455 Florida Yes, let us see this information so we can decide where to invest so it represents our values.
- 3316 California We cannot change what we cannot measure. Making vague corporate promises does not keep corporations accountable. Boards of Directors respond to SEC requirements. The corporations
- 3169 Washington This is one of the more important and not often talked about avenues that should be being used to lower carbon emissions--the role of big banks.
- 2846 Illinois Other Investments Wall Street should be transparent and stop hiding from public scrutiny
- 2710 California Stocks Other Investments Shareholders should have more transparency in regards to their investments.
- 2414 New York Pension I would like to know if any of my holdings have anti climate change support!
- 2413 Louisiana Pension I would like to know how my pension is being invested bases on environmental awareness
- 2318 Pennsylvania Pension Stocks I have tried to get rid of stocks that support fossil fuel development.
- 2150 Pennsylvania IRA We need to cut back on supporting investments that finance heavy polluters
- 2145 Colorado IRA We all need transparency in this because we need to know who we should support and who we shouldn't. I will not support companies whose projects are harmful to our climate and our earth.
- 2129 California IRA My investments are in sustainable ETFs to avoid contributing to
- 2130 Pennsylvania IRA My IRA is 100% invested in social and green things. I do not invest in coal
- 1716 Oregon IRA Pension Other Investments As we deal with the climate crisis, it is critical that investors are able to make informed choices concerning the carbon burden in their investments. Transparency about carbon emissions arising from Wall Street investments is an important first step in enabling informed investor
- 1650 California IRA Pension Stocks I would hate to find out I am funding THE things I am morally opposed to.
- 1229 Texas Bonds IRA Stocks Companies and operations emitting CO2 are not reliable self-reporters and there's no globally agreed standard. Nations and their political subdivisions are a patchwork quilt. SEC
- 519 New York 401k IRA Excellent idea! Just please give us a comparison scale so we know what the numbers mean. Thanks!
- 3418 Washington What will the "Filthy Rich" do when the resources are gone and they see they "...paved Paradise, put up a parking lot."
- 3392 Illinois We need to resurrect OCCUPY WALL STREET and add this dimension !!!!
- 3055 Massachusetts The clock is ticking not for legislation or form of government BUT FOR THE EXISTENCE OF OUR PLANET. After 3 centuries of the Dark Ages, there was the Enlightenment. Humanity has
- 2128 Florida IRA Money is meaningless if we don't have a planet.
- 2127 Maryland IRA It's past time. Fossils are so 19th century.
- 1446 Wisconsin Bonds Pension Stocks I DON'T WANT TO HAVE ANY CLIMATE DENIARS IN MY PORTFOLIO...
- 3186 Colorado This s**t needs to stop now
- 3118 New Mexico The world is dying, and you could give a crap!!!