Former SEC Chairman Embraces Climate-Related Disclosure

Jay Clayton had previously defended voluntary ESG disclosures as opposed to mandatory, insisting that flexible requirements would be effective.

Public corporations should disclose their plans for achieving net-zero carbon emissions by 2050, said former Chairman of the US Securities and Exchange Commission (SEC) Jay Claytonhaving favoured only voluntary disclosures while in office. 

Speaking to Mark Wiseman, former Chair of the Global Investment Committee at BlackRock, at the Funds Congress, Clayton said corporates should disclose “everything they know with a fair degree of certainty that would be material to an investor” about their exposure to climate risk.  

However, he added that a US climate risk disclosure framework should be subject to a “safe harbour” which will protect companies that made long-term estimates of climate risk in “good faith”. This was a point both Wiseman and Clayton reiterated in an opinion piece for CNBC, responding to BlackRock CEO Larry Fink’s 2021 letter to CEOs. 

“The further you project out into the future how your company will be impacted by climate risk, the less that certainty exists,” he said.

In 2018, Clayton defended voluntary ESG disclosures as opposed to mandatory, insisting that flexible requirements would be effective.  “Although third-party standards relating to ESG topics may allow… [continues]

Read the full article on Regulation Asia’s sister publication, ESG Investor.

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