NYSIF Executive Director & CEO Gaurav Vasisht has submitted a letter of support for the Securities and Exchange Commission's (SEC) proposed rules aimed at enhancing and standardizing climate-related disclosures to facilitate investor decision-making. NYSIF evaluates climate-related exposures as part of its investment diligence and is committed to achieving net zero carbon emissions in its investment portfolio by 2040.
“NYSIF strongly supports the Proposal because it would require companies to provide detailed and decision-useful data on direct and indirect emissions up and down their value chain. It would also ensure that investors understand companies' risk governance, oversight, and management, their transition plans, as well as milestones and strategies to achieve their climate objectives,” said CEO Gaurav Vasisht. “The Proposal's much-needed transparency will mitigate abusive greenwashing and carbon offsetting practices. It will also reduce investor reliance on third-party data providers, cutting unnecessary costs and helping investors make informed investment and voting decisions appropriate to their risk profiles.
“Underappreciated and often lost in the debate is how much investors struggle, and the costs they incur, to create a clear picture of their portfolio carbon emissions, relying on third-party providers for modeled data that presents an incomplete and inaccurate picture of their holdings,” CEO Vasisht said. “Given increasing investor commitments to achieving net zero emissions and the growing demand for climate-related data, this Proposal will mark a turning point and a significant milestone for investors. We urge the Commission to adopt the rule without delay together with our recommendations to strengthen its provisions.”
While NYSIF supports the overall thrust of the Proposal, it also recommends that the Commission strengthen certain key aspects. It suggests that the Commission (1) make Scope 3 disclosures more uniform and comprehensive across market participants to prevent under-reporting of valuable data, (2) expand the disclosure requirement to include increasingly important and growing parts of investor portfolios, such as structured products and alternative assets classes to ensure that large segments of the financial markets do not remain opaque to investors, and (3) clarify that company disclosures, transition plans, and strategies must consider the impact of climate-related risks on workers and low-income, minority communities, which are often disproportionately impacted by climate change and whose well-being is inextricably linked to a just transition.