Verena Radulovic on the SEC draft rule on corporate climate-related disclosures

Statement of Verena Radulovic
Vice President of Business Engagement, Center for Climate and Energy Solutions
March 21, 2022

On the U.S. Securities and Exchange Commission (SEC) draft rule on corporate climate-related disclosures:

“The draft rule proposed today signals the recognition that delayed action to address climate change comes at a cost. Investors need consistent, comparable, and decision-useful information to understand which companies are best prepared for climate change and leading the charge to capitalize on the low-carbon future. Reporting direct and indirect emissions – Scope 1 and 2 – offers investors crucial insights into how well positioned a company is to insulate against climate risks, especially transition risks, and to take advantage of new opportunities that accelerate decarbonization and build climate resilience. Phasing in Scope 3 reporting with a safe harbor for liability is also a welcome step, recognizing that Scope 3 emissions can provide important insights on a company’s climate risk while also recognizing data inconsistencies in Scope 3 reporting. A stakeholder process including industry-informed working groups would help determine which Scope 3 emissions should be included for different industries.

“Companies will learn critical lessons as they examine how their assets and facilities are exposed by worsening climate change and assess how the low-carbon transition will affect their business. A C2ES report released earlier this month found that there are still several challenges facing companies in assessing their climate-related risks and in standardizing analysis for how their operations rate in varying scenarios of physical and transitional risks. How policymakers and the SEC work in tandem with companies to address these issues will determine how effectively they are able to manage the low-carbon transition and reduce emissions across their operations, value chains, and in the goods and services they provide.”

See C2ES’s comments on the SEC rule: here. C2ES recommendations included in the draft rule announced today, include:

  • Inclusion of Scope 3 disclosure, with phase-in assurance
  • Differentiation between small and large companies for the purposes of disclosure
  • Reporting on plans to meet greenhouse gas reduction goals
  • Safe harbor for forward-looking estimations and projections, like net-zero goals, to encourage robust disclosure

Explore the new C2ES report on how companies approach climate risk disclosures and the role of policy: Emerging Practices in TCFD-aligned Climate Risk and Opportunity Analysis and Disclosure. C2ES’s report also makes the following policy recommendations that would help companies improve their climate-related financial risk disclosure, including:

  • Establishing a federal hub with resources to help companies measure risk;
  • Setting a standardized but flexible, approach to assess physical and transitional risk;
  • Producing federal guidance on the use of scenario analysis that distinguishes between transition scenarios which can be highly sector-specific; and
  • Endorsing the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) framework.

To reach a C2ES expert, contact Alec Gerlach at

About C2ES: The Center for Climate and Energy Solutions (C2ES) is an independent, nonpartisan, nonprofit organization working to forge practical solutions to climate change. Our mission is to advance strong policy and action to reduce greenhouse gas emissions, promote clean energy, and strengthen resilience to climate impacts. Learn more at