Rep. Casten, Warren, 'Climate Risk Disclosure Act' Passes House Financial Services Committee

WASHINGTON, May 13 -- Rep. Sean Casten, D-Illinois, issued the following news release on May 12, 2021:

The House Financial Services Committee today voted to approve the Climate Risk Disclosure Act of 2021. The bill, introduced by U.S. Representative Sean Casten (IL-06), would reduce the chances of environmental and financial catastrophe by requiring public companies to disclose more information about their exposure to climate-related risks. By increasing market transparency, this bill will empower investors to appropriately assess climate-related risks and help the market transition from fossil fuels to cleaner and more sustainable energy sources.

U.S. Senator Elizabeth Warren (D-MA) released the Senate companion to the bill last month, following a new poll from Data for Progress showing that a majority of voters in the United States "want the government to enact and enforce mandatory disclosure rules so Wall Street does not hide behind their investments that are driving climate change."

Casten, a member of the House Financial Services Committee, advocated for his bill in today's markup. The bill was reported favorably out of the Committee by a vote of 28 -24 and now heads to the House Floor. Click here (https://www.youtube.com/watch?v=CTpfUJl4Bq0) to watch.

Casten said, "The wildfires, blackouts, and superstorms we saw this past year make crystal clear: we must act now to address climate change. Swiss Re recently found that global GDP will decrease by 4% even IF we meet the Paris goals of one and a half degrees of warming and up to 18% if we do not. My bill represents a market based solution to understand the impact of a changing climate on companies and provide investors, lenders and insurers with better information."

"We cannot afford to ignore the threats of the climate crisis, and it's time to fight back against giant corporations that want to pollute our environment and ask taxpayers to clean up the mess," said Senator Warren. "I am glad that my bill with Representative Casten passed the House Financial Services Committee today - I will continue pushing to give investors and the American public the power to hold corporations accountable for their role in the climate crisis."

Casten's Climate Risk Disclosure Act is cosponsored by U.S. Representatives Matt Cartwright (D-PA), Bill Foster (D-IL), Alan Lowenthal (D-CA), Nanette Diaz Barragan (D-CA), Joe Neguse (D-CO), Mike Levin (D-CA), Julia Brownley (D-CA), Nydia Velazquez (D-NY), Dean Phillips (D-MN), Brad Sherman (D-CA), Raul Grijalva (D-AZ), Jesus "Chuy" Garcia (IL), and Ayanna Pressley (D-MA). Warren's Senate companion is cosponsored by Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-RI), Richard Blumenthal (D-CT), Dianne Feinstein (D-CA), Chris Van Hollen (D-MD), Edward J. Markey (D-MA), Amy Klobuchar (D-MN), Tina Smith (D-MN), Kirsten Gillibrand (D-NY), Jeff Merkley (D-OR.), Michael Bennet (D-CO), Tom Carper (D-DE), Majority Leader Chuck Schumer (D-NY), and Cory Booker (D-NJ).

Earlier today, the Union of Concerned Scientists released a letter of support for the Climate Risk Disclosure Act signed by 82 organizations across a broad ideological spectrum.

Kathy Mulvey, Accountability Campaign Director, Climate & Energy Program, Union of Concerned Scientists said, "We are excited that the Climate Risk Disclosure Act passed out of committee today and look forward to helping advance this legislation, which is supported by a broad range of environmental and social justice groups, faith-based and public interest organizations and socially responsible investors. It's time to ensure science and data are available to help companies better plan for a low-carbon future and provide investors with the information needed to make smart decisions."

This legislation comes on the heels of the positive development by the Securities and Exchange Commission (SEC). On March 15th the SEC extended a request for public comment on their disclosure rules and guidance as they apply to climate change disclosures, and whether and how they should be modified.

Currently, public companies are not mandated to disclose their exposure to climate-related risks. As a result, investors lack access to basic information about the potential impact of the climate crisis on American companies, creating enormous environmental and financial risks.

The Climate Risk Disclosure Act directs the SEC, in consultation with climate experts at other federal agencies, to issue rules within two years that require every public company to disclose:

* Its direct and indirect greenhouse gas emissions;

* The total amount of fossil-fuel related assets that it owns or manages;

* How its valuation would be affected if climate change continues at its current pace or if policymakers successfully restrict greenhouse gas emissions to meet the 1.5 degrees Celsius goal; and

* Its risk management strategies related to the physical risks and transition risks posed by the climate crisis.

The bill directs the SEC to tailor these disclosure requirements to different industries and to impose additional disclosure requirements on companies engaged in the commercial development of fossil fuels. It will help the market appropriately assess the risk of climate change and push private and government actors to address the climate crisis with the seriousness that it deserves. Without costing the taxpayer a penny, this bill will help promote financial stability at home and abroad.

A broad coalition of members have joined Casten and Warren in expressing support for the Climate Risk Disclosure Act:

"Coloradans and Americans see the threats climate change poses to every sector of our economy," said Senator Michael Bennet. "Shareholders and the public deserve to know the full picture of a company's exposure to climate-related risks, as well as the steps it is taking to reduce emissions and protect their financial stability."

"This bill will ensure corporate giants play their part in fighting climate change. The climate crisis is here, and publicly traded companies should analyze its risks to their companies and the economy, and make that information public. The Climate Risk Disclosure Act would require them to do just that, helping spur investments in clean energy and avoid a financial crisis," said Senator Blumenthal.

"Climate change is one of the greatest threats we face. Rising seas, more intense weather, and warming temperatures will continue to have increasing and significant impacts on our country's infrastructure and economy. Equipping investors with a better understanding of the climate-related risks facing America's public companies will enable smarter and safer investment decisions, provide greater long-term stability to the American economy, and help our nation fight climate change," said Senator Booker.

"We continue to experience the harmful effects of climate change, including more frequent and dangerous wildfires, droughts, floods and hurricanes. That is why the risks that climate change poses to companies must be made clear to the public and shareholders. They need to be able to factor the potential consequences of climate change into their financial decision-making, said Senator Feinstein"

"Climate change poses severe threats not just to our environmental health, but also to the long term strength of our economy. For decades, big companies have polluted our environment with little transparency with the public and it's time they disclose the climate-related risks that burden consumers and hurt workers," said Senator Gillibrand. "I'm proud to join Senator Warren in this fight to address the climate crisis and hold corporations accountable for their climate risks."

"From farms underwater in the heartland to raging wildfires out west to shipping delays on our waterway infrastructure, we're seeing the consequences of climate change in communities across the country," said Senator Klobuchar. "This legislation will ensure that public companies are adequately assessing climate-related risks to our economy and sharing that information with the public. We cannot close our eyes to the climate change that is already happening around us. We must act."

"We can protect our economic stability and protect the planet at the same time. The climate crisis is an immediate and ongoing threat to our economy, businesses, and communities--and everyone needs to know the risks it poses. Our goal is 100 percent clean, renewable, zero-emissions energy sources, and disclosures in our financial system need to reflect the future of that energy system," said Senator Markey.

"We're already feeling the impacts of climate chaos all around us--from lives lost, displaced communities, and billions of dollars in damages from wildfires, devastating and more powerful hurricanes, and droughts," said Senator Merkley. "Investments in fossil fuels continue to fan the flames of this crisis, while also putting investors' money at grave risk--sometimes without them even knowing. It's time for transparency and open communication about those risks, so Americans can make a truly informed choice about where their money is going."

"Publicly traded companies have an obligation to their shareholders to disclose all material risk, and climate change is no longer a theoretical problem to be contended with some time in the future. It is here, and it is costing companies money. That cost must be analyzed and disclosed," said Senator Schatz.

"Climate change represents an existential threat to our country, our economy and our planet," said Senate Majority Leader Chuck Schumer. "That's why we must use every tool at our disposal to protect the environment and ourselves from the risks posed by climate change. I'm proud to co-sponsor the Climate Risk Disclosure Act, which will help to hold corporations accountable and combat the climate crisis by accelerating the transition from fossil fuels to clean energy, making our world a safer and healthier place for generations to come."

"Climate change is a serious threat but there's great economic opportunity if we all rise to the challenge of responding to it," said Senator Smith. "This bill holds public companies accountable for their direct and indirect greenhouse gas emissions, as well as for their investments in the oil and gas industries. It also aims to encourage public companies to act on climate, by requiring them to assess the risk of climate change on their valuation. This will promote financial stability and improve our climate, without spending taxpayer money."

"The climate crisis poses an imminent threat to our environment and our economy. Investors have a right to know what steps companies are taking to address these threats and what losses they may suffer as a result of inaction. This legislation will not only provide the transparency investors deserve, but will also ultimately help incentivize corporations to step up in the fight against climate change," said Senator Van Hollen.

"We are on the precipice of a climate catastrophe. Experts by the dozen warn that its leading edge will be a massive hit to our economy," said Senator Whitehouse. "Companies that ignore their exposure to climate-related risks disserve both their shareholders and the public. Accurate disclosure of those risks will help us avert wide-reaching environmental and financial disasters."

As a former clean energy engineer and entrepreneur, combatting the climate crisis is one of Congressman Casten's highest priorities.

* Casten and U.S. Senator Elizabeth Warren (D-Mass.) originally introduced H.R. 3623 the Climate Risk Disclosure Act of 2019 in the 116th Congress, where it passed the House Financial Services Committee in July of 2019. More recently, the bill was recently included in the Climate Leadership and Environmental Action for our Nation's (CLEAN) Future Act, ambitious new climate legislation introduced by Energy and Commerce Committee Chairmen to ensure the United States achieves net zero greenhouse gas pollution.

* Casten and U.S. Senator Feinstein (D-CA) recently introduced the Addressing Climate Financial Risk Act, new legislation to improve the ability of federal regulators to understand and mitigate risks from climate change within the financial system. A broad coalition for financial organizations have expressed their support for the legislation.

* Last Congress, Casten and U.S. Senator Brian Schatz (D-HI), introduced the Climate Change Financial Risk Act of 2019 to direct the Federal Reserve to conduct stress tests on large financial institutions to measure their resilience to climate-related financial risks. Last month, Senator Warren unveiled the BUILD GREEN Infrastructure and Jobs Act which would invest $500 billion over ten years in state, local, and tribal projects to jumpstart the transition to all electric public vehicles and rail and help modernize the nation's crumbling infrastructure.