The Climate Risk Disclosure Act Would Accelerate the Transition from Fossil Fuels
Washington, D.C. – Colorado U.S. Senator Michael Bennet today joined a group of his Senate colleagues in reintroducing the Climate Risk Disclosure Act of 2019 to require public companies to disclose critical information about their exposure to climate-related risks. The legislation will 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.
“Climate change is an urgent threat that requires every aspect of society — including business — to take action,” said Bennet, a member of the Senate Democrats Special Committee on the Climate Crisis. “Shareholders and the public deserve to know the full picture of a company’s exposure to climate-related risks, as well as its steps to reduce emissions and address the climate crisis.”
Recent data show that a major climate-related disaster could trigger severe economic impacts. A report released last month by Moody's Analytics says that climate change could create tens of trillions of dollars in damages to the world economy by the year 2100, and will "universally hurt worker health and productivity."
The Climate Risk Disclosure Act directs the U.S. Securities and Exchange Commission (SEC), in consultation with climate experts at other federal agencies, to issue rules within one year that require every public company to disclose:
- Its direct and indirect greenhouse gas emissions;
- The total amount of fossil-fuel related assets that it owns or manages;
- How its 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
- Its risk management strategies related to the physical risks and transition risks posed by the climate crisis.
The Climate Risk Disclosure Act also directs the SEC to tailor these disclosure requirements to different industries and to impose additional disclosure requirements on companies engaged in the commercial development of fossil fuels. The legislation will help the market appropriately assess the risk of climate change which will help push private actors and government actors to act more decisively to address the climate crisis and promote financial stability without costing a penny of taxpayer money.
The Climate Risk Disclosure Act is led by Senator Elizabeth Warren (D-MA) and, in addition to Bennet, is cosponsored by Senators Brian Schatz (D-HI), Sheldon Whitehouse (D-RI), Chris Van Hollen (D-MD), Amy Klobuchar (D-MN), Kirsten Gillibrand (D-NY), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Edward J. Markey (D-MA), Jeff Merkley (D-OR), Kamala Harris (D-CA), Tina Smith (D-MN), Dianne Feinstein (D-CA), Tom Carper (D-DE), and Senate Minority Leader Chuck Schumer (D-NY).
Bennet, who joined Senate Democrats in launching a new Special Committee on the Climate Crisis in March, has long championed efforts to address the climate crisis. Last month, Bennet called on the U.S. Department of Agriculture to provide a complete list of its climate-related studies, which demonstrate the effects of climate change, after a report revealed the department had only publicized two of at least 45 climate-related studies. He recently introduced legislation to lock In a science-based method to determine the cost of carbon pollution, and introduced the Shelter Act, which would create a new tax credit to help Americans protect their homes and businesses against natural disasters.