The Commodity Futures Exchange Commission has called for enhanced disclosure by public companies of climate-related financial risks to help prevent climate change from disrupting the U.S. financial system.

In a report issued on Wednesday, a CFTC task force said disclosure is “an essential building block to ensure that climate risks are measured and managed effectively.”

But while the quality of the disclosed information has improved over the past several years and the number of entities disclosing climate-related information has increased, “the existing disclosure regime has not resulted in disclosures of a scope, breadth, and quality to be sufficiently useful to market participants and regulators,” the report said.

Under existing law, material climate risks must be disclosed. The task force recommended, among other things, that disclosure should cover material risks for various time horizons and that financial regulators should clarify the definition of materiality for disclosing medium- and long-term climate risks.

As Politico reports, “many companies currently do not consider climate-related risks as material given the uncertainty of when they will feel the effects acutely.”

The nearly three dozen members of the task force convened by CFTC Commissioner Rostin Benham include officials from U.S. banks, asset managers, academia and environmental groups. Their report comes amid pressure from several U.S. lawmakers, such as Sen. Elizabeth Warren (D-Mass.), on the Securities and Exchange Commission to require more robust risk disclosure.

The task force noted that “Large companies are increasingly disclosing some climate-related information, but significant variations remain in the information disclosed by each company, making it difficult for investors and others to understand exposure and manage climate risks.”

The SEC in 2010 issued guidance on requirements for disclosure of climate risk but according to the CFTC, it “has not resulted in high-quality disclosure across U.S. publicly listed firms” and it “could be updated in light of global advancements in the past 10 years.”

“The unique nature of climate risk means that clearer rules are needed to increase the level and improve the quality of disclosure,” the report said.

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