The U.S. Chamber of Commerce and the American Petroleum Institute, two of the biggest business associations, are warning against a one-size-fits-all approach to the rules, which could expose companies to legal trouble if they don't accurately report information.
Republican officials are signaling that they will fight the effort, giving companies a powerful set of friends. BlackRock’s Fink argues that many publicly traded companies — those accustomed to sharing information widely with investors — are on track to manage their climate risk amid growing market pressure. He says the government should focus on privately held firms that are taking on more carbon-intensive businesses but don't divulge as many details of their operations.
"There is, without question, significant and systemic risk to the financial system that is created by climate change," said Rep. Sean Casten , who wrote legislation with Sen. Elizabeth Warren that would require the SEC to develop climate disclosure rules. "Yet if you are an investor and you want to understand how much of that risk you're exposed to, you don't have any unambiguous metric that says this is what your exposure is that's done in a consistent way.
The official who's expected to lead the way for Democrats is Gary Gensler, Biden's nominee to chair the SEC. Gensler's selection is encouraging to climate disclosure advocates because he took on the banks when he was the lead regulator writing financial trading rules after the 2008 Wall Street meltdown.
While some companies will resist government intervention, others see benefits in having regulators accelerate standard reporting metrics. But industry representatives say the methods used to measure and report climate impacts are still developing and it may be a gamble to codify them into federal rules.