Hill Heat

Full committee hearing on “Oversight of the U.S. Securities and Exchange Commission.”

• Gary Gensler, Chair, U.S. Securities and Exchange Commission

Securities and Exchange Commission Chair Gary Gensler said Tuesday that the agency has not yet released a final rule requiring disclosure on climate risk partly because of public concern that companies would need to report so-called Scope 3 carbon emissions across their supply chains.

The SEC has received more than 16,000 public comment letters about the climate risk disclosure rule that it proposed in March 2022, with many asserting that Scope 3 reporting will prove onerous for small businesses, Gensler said. “We got a lot of comments around what’s called Scope 3 disclosures, and that’s what we’re trying to move forward on,” he said in testimony to the Senate Banking Committee.

Gensler declined to estimate when the SEC will adopt a final regulation, while noting that rule revisions can take from 12 to 24 months. “We try not to do things against the clock,” he said, adding “it’s really when the staff is ready and the [five-member agency] commission is ready.”

Referring to the proposed requirement that companies report carbon emissions and climate risk, Gensler said, “many U.S. issuers are already disclosing climate risk information and investors are making investment decisions” based on the information. The SEC, for the sake of investors, aims to ensure the reports are consistent and comparable, he said.

“We have no climate agenda whatsoever,” he said. “We’re not climate regulators.”

Gensler came under fire from the other side of the aisle, as Senator Elizabeth Warren, D-Mass., criticized him for not pushing through the disclosure rule sooner.

“When you were nominated two and a half years ago, you said the giant corporation should not be able to hide their climate risks from investors,” Warren told Gensler. “Without a strong climate risk disclosure rule, that is exactly what companies will continue to do.