Publicly traded companies would be required to disclose financial risks related to climate change under legislation approved by the House Wednesday and sent to the Senate where it faces an uncertain future.
The legislation would also require disclosure of other so-called environmental, social, and governance information such as that related to political spending, tax jurisdictions and executive pay raises. It was approved by a vote of 215-214 over opposition from Republicans and business groups including the
“Investors who are the true owners of our nation’s public companies recognize the importance of this information to their decision-making, and have been demanding this information for years,” House Financial Services Committee Chair
The legislation comes as more than 70% of companies, on average, still don’t share climate-related information across categories recommended by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures,
The measure is unlikely to muster the Republican support needed to pass the narrowly divided Senate, but it comes as the
Under the House legislation, annual disclosures would be required of information related to the physical risks of flooding, extreme weather and rising temperatures to fixed assets, as well as “transition risks” created by efforts to reduce greenhouse gas emissions and increase resilience to climate change, according to an
The bill would also require the SEC to issue new rules requiring disclosure of spending on political ads and dues paid to trade groups. Multinational businesses would also have to disclose the tax jurisdictions where each subsidiary resides and any other locations where subsidiaries are organized or incorporated. In addition, public companies would face mandates to disclose the percentage increase in median pay for executive officers and all other employees in the last fiscal year.
Opponents of various components of the package includes the
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