David Fredrickson’s commentary was included in a Sustainable Views article discussing the Securities and Exchange Commission’s announcement that it would pause implementation of its new climate disclosure rule in light of various legal challenges from states and business groups.
David explains how submitting this information as an official filing to the regulator – which carries the heightened risk of litigation in the case of misleading or inaccurate statements – is very different to voluntarily producing a sustainability report. “That’s a real difference: bringing it to the U.S. markets where there is the possibility of liability,” he says. “Now they have to get the lawyers involved, whereas before it would be their sustainability people, maybe their marketing people. Probably a large number of companies need to do some searching about how rigorous their [sustainability reporting] process has been to date.”
Commenting on the pause, David said, “Obviously the prime question [of clients] is: does this mean I can put my pencil down and ignore this rule? And certainly, the answer from me is no. This is a time for them to reflect and think: if we had to do this, what would it require? Hopefully they are still doing that mental exercise.”
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