California Attorney General Rob Bonta has filed an amicus brief with the United States Court of Appeals for the Eighth Circuit to support the United States Securities and Exchange Commission’s (SEC) climate disclosure rule. The rule, finalized in March, mandates that companies regulated by the SEC report climate-related risks, their strategies to manage these risks, and specific information about their greenhouse gas emissions. The rule is currently facing challenges from industry groups and other states that argue the requirements exceed the SEC’s legal authority.
“From rising sea levels to extreme weather, we know that the climate crisis presents increasing risks to corporations across this country. Yet, all too often, these risks are hidden from investors, including the institutional investors responsible for many Americans’ retirement savings and pensions,” said Attorney General Bonta. “The SEC’s climate disclosure rule will provide the transparency needed to enable Americans to make informed investment decisions, which in turn will strengthen our economy.”
Climate change poses substantial risks to financial markets and investment portfolios, including market-invested retirement funds. These risks include damage to capital investments from increasingly frequent and severe extreme weather events. Last year alone, such events caused or exacerbated by climate change cost the U.S. $92.9 billion. California ranks among the top five states suffering economic effects from climate-related natural disasters.
By requiring corporate disclosure of financial risks related to climate change impacts, the rule aims to enable investors—including those in California where over $360 billion is invested in capital markets for state teachers, firefighters, and other public servants—to make more informed decisions.
In his amicus brief, Attorney General Bonta expressed strong support for the SEC’s rule requiring corporations regulated by the SEC to assess and disclose climate change-related business risks. Additionally, by mandating some greenhouse gas emissions reporting, the rule serves as a deterrent against greenwashing—false claims regarding a company's environmental sustainability.
A copy of the amicus brief can be found here.