SEC Commissioner Allison Herren Lee Criticizes Regulation S-K Amendment for Failure to Address Climate Change

On Wednesday, August 26th, the U.S. Securities and Exchange Commission approved an amendment to Regulation S-K that gives companies more flexibility in disclosing risk factors and certain legal proceedings in their financial statements by a vote of 3-2. Commissioner Allison Herren Lee, who in a January statement criticized the SEC for “ignoring” climate change, voted against the recent rule change because of its silence on “on two critical subjects: diversity and climate risk disclosures.”

In a dissenting statement, available here, Commissioner Lee condemned the SEC for failing to address climate change despite having received thousands of letters from stakeholders requesting that the SEC issue rules requiring climate-related disclosure, and despite the “unprecedented and massive campaign to obtain voluntary climate-related disclosures from companies.” Commissioner Lee highlighted that “climate change poses a threat to economic stability that transcends typical financial risk.” She also noted that investors are not receiving material climate-related information under current SEC disclosure requirements.