Historic Corporate Climate Disclosure Rule Passed by the SEC

In March, the Securities and Exchange Commission (SEC) voted to require companies to disclose climate risks for the first time in American history. This regulatory mandate comes after three years of intense advocacy and more than 24,000 public comments. It confirms what sustainable investors have long known: that environmental practices, and carbon emissions in particular, are material to the financial performance of companies, and as such, investors need to know how they are being managed by the companies they own.

Protecting investors is at the core of SEC regulation. The disclosure of risks facing companies helps investors to gauge management’s strategies for adapting to the increasing economic volatility posed by climate change. This is why nearly 75 percent of companies in the S&P 500 already voluntarily include climate disclosure and why nearly half already report their Scope 1 and Scope 2 greenhouse gas emissions annually. The fact that the SEC is now requiring the other half to do so is not radical or anti-business.

Many of the largest corporations on the planet have already seen the value that climate disclosure provides. The assurance not only keeps investors in the loop about the steps companies are taking and the costs they are incurring to address these risks, but it also warrants their confidence and therefore continued investment.

Corporate expenditures on carbon credits and renewable energy credits are material to the bottom line, and this regulation allows investors to hold companies accountable for omitting carbon-related information from their financial statements.

The climate disclosure rule is also critical because it creates a uniform standard for how companies disclose the information. The wide array of approaches taken by companies was confusing investors. Now they will be able to compare companies on similar terms to make more accurate investment decisions.

Corporate Engagement Highlights

We continue to encourage companies to reduce their toxic outputs and pay livable wages by collaborating with fund managers and colleagues in sustainable, responsible, and impact investing.


We signed a letter addressed to Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, SMBC, and Wells Fargo requesting an end to all financial relationships with Formosa Plastics Group and its subsidiaries.

Organized by our friends Trillium Asset Management—along with RISE St. James, Friends of the Earth, and Investor Advocates for Social Justice—the letter pertains to the “Sunshine Project,” a proposed chemical manufacturing complex in St. James Parish, Louisiana.

We asked Bank of America in particular not to finance this project because of the significant potential for environmental and societal harm. The letter states:“The area along the lower Mississippi River between Baton Rouge and New Orleans is widely known as ‘Cancer Alley’ due to the high cancer rates linked to extremely elevated toxic pollution levels. According to a ProPublica investigation mapping EPA data, living in certain areas along the lower Mississippi would lead to a cancer risk 47 times the EPA’s acceptable level of risk. A recent Tulane study reinforced that mapping, finding a link between air pollution and higher cancer rates among Black or impoverished communities in Louisiana. And toxic air pollution in the area is rising as more plants are built (seven since 2015). The Sunshine Project would continue this trend, exacerbating the environmental racism St. James Parish residents already face.”

We highlighted the reputational risks for financial institutions associated with Formosa and this project. We are awaiting a response from these financial institutions on this request.


Our advocacy in support of clean cars, trucks, and fleets in 2023 helped three new states—Colorado, Maryland, and New Mexico—adopt ambitious clean vehicles regulation: the Advanced Clean Trucks rule, which ensures that by 2035, 75 percent of new medium- and heavy-duty models sold in those states are zero-emission vehicles. These three states join California, Massachusetts, New Jersey, New York, Oregon, Vermont, and Washington in passing such legislation. Meanwhile, Connecticut, Maine, and North Carolina are moving closer to implementing their version of the rule, while Illinois and Pennsylvania are the top advocacy priority states this year to pass it.

“These measures will help meet decarbonization goals and provide clean air to communities, customers, and employees while reducing operating and maintenance costs.” In addition, five new states—Colorado, Delaware, Maryland, New Jersey, and New Mexico—adopted the Advanced Clean Cars II rule, which requires an increase in sales of light-duty zero-emission vehicles each year until 100 percent of new models sold are zero-emission by 2035. These five states join California, Massachusetts, New York, Oregon, Vermont, Virginia, and Washington in adopting the rule, with Maine and Rhode Island set to approve it soon. Virginia and Connecticut are this year’s advocacy priorities to adopt it.

California also led the nation in finalizing the Advanced Clean Fleets rule, which requires fleets, businesses, and public entities that own or operate truck fleets to purchase and operate zero-emission fleets by 2045. All medium- and heavy-duty vehicles sold in California must be zero-emission models by 2036. In aggregate, these measures will help meet decarbonization goals and provide clean air to communities, customers, and employees while reducing operating and maintenance costs.


We signed a letter coordinated by the Interfaith Center for Corporate Responsibility addressed to a few dozen of the largest U.S. companies, including Wal-Mart, Amazon, CVS, Home Depot, and Dollar Tree. We are urging them to collaborate with workers, labor unions, and franchisee/subcontracted operators to increase employee pay toward a living wage.

This engagement encourages companies to take steps that would increase investors’ understanding of company wage practices and progress toward paying living wages, including:

  • A policy that makes clear the company’s commitment to taking steps towards paying its workers a living wage
  • Ending the subminimum wage
  • Disclosing wage-setting strategies and compensation metrics
  • Performing and disclosing cost-benefit analyses of wage increases
  • Expanding the scope of the board’s compensation committee to include oversight of compensation practice

Research shows in 2022, 51 percent of all the workers at Russell 1000 companies, who in total made up about 15 percent of the employed population in the U.S., were not earning a family-sustaining living wage. Low wages cause high employee turnover, which is an avoidable cost to businesses.

Thus far, about a dozen companies have responded, but none have indicated a willingness to adopt our recommendations. Amazon reported that its median pay is up recently and now stands at more than $40,000, with delivery drivers earning $20 per hour. CVS’s starting pay is now $15 per hour. Dollar Tree is conducting a wage and benefits assessment, while a shareholder proposal on this matter at Walgreens earned 13 percent shareholder support.

Meetings with many companies are still being scheduled, so the status of these engagements will be shared.

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