Golden State Today

California Attorney General Rob Bonta has filed an amicus brief with the United States Court of Appeals for the Eighth Circuit in support of the United States Securities and Exchange Commission’s (SEC) climate disclosure rule. The rule, finalized in March, mandates that companies regulated by the SEC report climate-related risks, their strategies to manage these risks, and specific information about their greenhouse gas emissions. This regulation is currently facing challenges from industry groups and other states, which claim 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 significant risks to financial markets and investment portfolios, including market-invested retirement funds. These risks include damage to capital investments due to the increasing frequency and severity of extreme weather events. Last year alone, 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 climate change impacts, the rule aims to help investors make more informed decisions. This is particularly relevant for California, where over $360 billion is invested in capital markets for pensions benefiting teachers, firefighters, and other public servants.

In his amicus brief, Attorney General Bonta expressed strong support for the SEC’s climate disclosure rule. The regulation requires corporations regulated by the SEC to assess and disclose climate change-related risks affecting their businesses. Additionally, by mandating some greenhouse gas emissions reporting, it aims to deter greenwashing—false claims by companies regarding their environmental sustainability.

A copy of the amicus brief can be found here.