“Climate risks pose financial risks to companies,” said SEC Chairman Gary Gensler.
Gensler argued that the move could provide “reliable information about climate risks for the purpose of making investment decisions.”
The new regulations would be in force between 2024 and 2026. Small businesses could be exempt from the measure.
“This is a watershed moment,” said Allison Herren Lee, a Democratic commissioner who backs the change.
But Hester Peirce, the only Republican member of the SEC and the only one of the four commissioners to vote against the provision, argued that current rules take climate risk sufficiently into account and the new measure distorts the agency’s regulatory mission.
“This forces investors to view companies through the eyes of a set of stakeholders, for whom a company’s climate reputation is as important or more important than its financial performance,” Pierce said.
Many green shareholders and big investors pressure companies to take action against climate change.