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NYDFS Recommends SEC Establish Climate Risk Disclosure Rules

"Time is of the essence when it comes to climate change and we cannot let perfection be the enemy of the good. While there has been much focus on data gaps and the uncertainty around models and policy related to climate risks, these concerns should not excuse companies from disclosing such risks."
NYDFS Superintendent Linda Lacewell
"Time is of the essence when it comes to climate change and we cannot let perfection be the enemy of the good. While there has been much focus on data gaps and the uncertainty around models and policy related to climate risks, these concerns should not excuse companies from disclosing such risks."
NYDFS Superintendent Linda Lacewell

The New York State Department of Financial Services ("NYDFS") urged the SEC "to act without delay in its climate change disclosure rulemaking." In response to the SEC's request for public comment on climate risk disclosure, NYDFS recommended that such disclosures:

  • be "reliable, balanced, understandable, consistent over time, comparable among institutions within a sector, and provided in a timely manner";

  • include corporate governance, board oversight of climate-related issues, the impact on business strategy and processes for risk management;

  • include policies and procedures relating to climate risk for those regarding corporate governance;

  • take a proportionate approach reflective of an institution's scale, size and complexity; and

  • avoid over-reporting and ease the cost of compliance.

Primary Sources

  1. NYDFS Press Release: Superintendent Lacewell Calls for Disclosure of Climate-Related Financial Risks by Publicly Traded Companies
  2. NYDFS Comment Letter: Request for Public Input on Climate Change Disclosures Issued by Acting Chair Allison Herren Lee on March 15, 2021

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Tags

Regulated Activities
Disclosures
Regulated Products
ESG
Body of Law
Securities Law Banking Law
Jurisdiction
US - Federal
Organization
States
Sub-Author
NYDFS