Attorney General Bonta Files Amicus Brief to Defend Federal Climate Disclosure Rule

OAKLAND – California Attorney General Rob Bonta today 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. This March, the SEC finalized a federal rule that requires companies regulated by the SEC to report climate-related risks, such as those from extreme weather events; their strategy to manage these risks; and certain information about their greenhouse gas emissions. Currently, the rule is being challenged by industry groups and other states, which argue that the disclosure 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, for example, damage to capital investments from the increasing frequency and severity of extreme weather events. Last year, extreme weather events caused or exacerbated by climate change cost the U.S. $92.9 billion. California is among the top five states suffering economic effects from climate-related natural disasters. By requiring corporate disclosure of financial risks related to the impact of climate change, the rule will enable investors, including investors in California, where the state alone has more than $360 billion invested in the capital markets in pensions for the state’s teachers, firefighters, and other public servants, to make more informed investment decisions.

In today’s amicus brief, the Attorney General expresses his strong support for the SEC’s climate disclosure rule, which requires corporations regulated by the SEC to assess climate change-related risks affecting their businesses and disclose that information to investors. In addition, by requiring reporting of some greenhouse gas emissions information, the rule also provides an effective deterrent to greenwashing, or false claims by a company that its products and/or operations are environmentally sustainable. 

A copy of the amicus brief can be found here.