On June 7, 2022, EPRI submitted public comments to the Securities and Exchange Commission (SEC) on its proposed rule for climate risk disclosure (The Enhancement and Standardization of Climate-Related Disclosures for Investors, File Number S7–10–22). This publication represents EPRI’s comments. EPRI’s comments are also available along with other public comments on the SEC’s website for the proposed rule (link).
EPRI has been assessing the science relevant to company-level climate risk assessment, educating, and developing guidance, as well as advancing greenhouse gas (GHG) emissions accounting research and understanding of technical issues. Among other things, EPRI’s research has helped identify critical technical considerations for climate risk disclosure rules, including essential elements of company-level risk assessment. EPRI’s public comments include scientific observations to facilitate the development and communication of meaningful climate risk and risk management information, as well as technical considerations to specific proposals in the proposed rules.
Among other things, EPRI’s public comments discuss the conflation of issues that is creating confusion and complicating climate risk assessment, the state of science and risk assessment capabilities, meaningful risk and risk management information and potential disclosure requirements for non-risk information that would be misleading, developing scenario analysis that is reasonable and appropriate for assessing individual company risk and comparing to others, capturing all the uncertainties relevant to low-carbon transitions, differentiating changes in physical conditions due to climate change from historically conditions, and GHG emissions accounting and reporting issues, including the technical challenges associated with Scope 3 emissions where explicit risk metrics, rather than emissions reporting, are needed if potential changes in associated activities represent material risks.
Authors David Young