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RI Interview: Former SEC Chair Mary Schapiro on climate disclosure task force

RI Interview: Former SEC Chair Mary Schapiro on climate disclosure task force

Why the high-level Task Force is looking at the entire capital chain

Former SEC Chair Mary Schapiro

Following the launch today of the Task Force on Climate-related Financial Disclosures’ (TCFD) first report, Responsible Investor speaks to former Securities and Exchange Commission Chair Mary Schapiro, who is a member of the body’s secretariat.

The TCFD’s initial remit was to develop voluntary climate financial disclosures for use by corporates to provide information to their lenders, insurers and investors. In its first report, out today, the Task Force now says it will look at disclosures by institutional investors and asset mangers. Why has its scope been widened?

The FSB (Financial Stability Board) really left it to the Task Force to design its scope. Our view was that we needed to follow the entire chain of capital, and to have a complete picture for lenders, investors and underwriters. For this, it was important to have as broad a scope as we could, starting with first corporates and companies that are listed or have public securities including possibly debt securities, and to be able to understand the exposures of financial institutions and asset managers to climate related risks.

The recommendations the TCFD will make are for voluntary disclosure of climate related risks. Do you envisage individual nation states using the recommendations to inform regulation in this area?

It is entirely possible. Our remit is to develop a voluntary regime that will address the challenges for investors to utilize the disclosure that exists now such as non-comparable disclosure, fragmentation, a lack of specificity, boilerplate approaches. What jurisdictions ultimately choose to do with it really will be up to them. That’s not part of our decision-making.

Are you mindful of the cost burden that climate-related disclosure could place on organisations?

We are mindful of the cost burden. We haven’t yet drafted any specific disclosure recommendations but we are mindful of the charge of the FSB to be efficient. We don’t want to add burden. But here’s the important point, that in the G20 virtually all jurisdictions have requirements for companies to disclose material risks, and that includes material climate-related risks. So we think creating a coherent, sector specific framework for disclosure makes their current requirements easier to satisfy that what they are face with now, which is widely disparate potential disclosure regimes to choose from and a lack of clarity on the best way to disclose. While we are mindful of cost, we think this helps to solve a cost and complexity problem.

Is there scope for the Task Force to become a permanent body?

I don’t think so. We have certainly not had any conversations about anything like that. I don’t think that’s the intent. The intent is to try to tackle this really big problem where we have a lack of consensus on how to disclose information which is absolutely critical to lenders, investors and underwriters. I don’t think there is any intention to make it permanent.

You sit on the board of SASB, as does Mike Bloomberg. Where does the work of the TCFD leave SASB and other similar reporting frameworks such as the CDP and GRI?

It is our intention to leverage a great deal from the work which has already been done by great organisations, like SASB and GRI and many, many others, too many to name. They have done wonderful work and we are going to leverage that work to a great extent and we’ve met with all of them. We’ll continue to talk and meet with them, and seek their guidance and support as we go forward. It does not in any way diminish them or their work. In fact I think what it does is pull together a lot of great work that they have already done, in a more coherent way, that will be very, very useful for companies, investors and others. In some ways it shines a light on work that they’ve been doing for a long time and a light that they deserve to bask in.

“Our view was that we needed to follow the entire chain of capital”

It has been noted that there is not an asset owner representative on the TCFD’s board. Will this be addressed going forward with an asset owner member?

It’s certainly possible that there may be an asset owner member. The membership is selected not by the Task Force itself but by the FSB. But I know they are very much aware of the desire for more asset owner representation, as we are clearly aware too.

The SEC has existing guidance on climate change disclosure which has not yet been enacted. Could the work of the Task Force prompt it to revisit this area?

I was the chairman when we did the climate guidance I think in 2010 which is frankly quite consistent with what we are now doing with the Task Force six years later. During my tenure we did act on climate guidance, we commented to public companies on the quality of their disclosure, which is a standard SEC practice. Since I left the agency, I honestly don’t know the extent to which they’ve continued to comment on corporate disclosure on climate impacts but the SEC is attuned to this issue. They last week told Exxon Mobil that they had to include in their proxy shareholder proposal, a resolution asking for better disclosure of climate impact on Exxon’s business. Exxon fought that at the SEC and the SEC overruled Exxon and is requiring them to include the shareholder proposal in their proxy. So the SEC fully appreciates that these are mainstream issues. They are important for investors to understand these issues in order to make good capital allocation decisions. So I think we’ll continue to see some focus there.


The Hon. Mary Schapiro was the 29th chair of the U.S. Securities and Exchange Commission, serving from 2009 to 2012. Appointed by President Obama, she was the first woman to be the permanent chair of the SEC. She was ranked by Forbes in 2009 as the 56th most powerful woman in the world. Since leaving office, she has taken a range of roles including non-executive directorships at General Electric and the London Stock Exchange Group.

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