Casten, Warren ‘Climate Risk Disclosure’ Act Passes House Financial Services Committee
Washington, DC – The House Financial Services Committee today voted to approve the Climate Risk Disclosure Act of 2019. The bill, introduced by U.S. Representative Sean Casten (IL-06), U.S. Representative Matt Cartwright (PA-08), and U.S. Senator Elizabeth Warren (D-MA), would require public companies to disclose critical information about their exposure to climate-related risks, which will help investors appropriately assess those risks, accelerate the transition from fossil fuels to cleaner and more sustainable energy sources, and reduce the chances of both environmental and financial catastrophe.
Casten, a member of the House Financial Services Committee, advocated for his bill in today's markup. The bill was reported out by the Committee on a vote of 34-25 and now heads to the House Floor.
To watch Casten's full testimony, click the image above or click here.
Casten said, "Climate change is a risk to the stability of the global financial system. This bill presents a market-based solution to understand the impact of a changing climate on companies and provide investors, lenders, and insurers with better information. I am proud to lead this effort with Representative Cartwright from Pennsylvania.
We must act now to address climate change. We are running out of time."
Quoting the Intergovernmental Panel on Climate Change, Casten noted that to hold temperature rise to just 1.5 degrees – a rise of serious consequence -- would require "rapid and far-reaching transitions in energy, land, urban and infrastructure [systems] (including transport and buildings), and industrial systems."
Pointing to dramatic increases in carbon emissions in recent decades, Casten lamented that the private sector is growing emissions but that private companies are not quantifying the risks associated with those growing emissions. Casten argued that companies need to divulge that information and help investors understand the risks of the investments they are making.
Casten continued, "In just the past few decades rising temperatures have worsened extreme weather events; wildfire seasons are longer; in Illinois the painting season has been shortened from seven months to six months. Mosquitoes are expanding their territory, spreading tropical disease. Two feet of sea-level rise is already baked in.
When I asked on the Science, Space and Technology Committee what cities we are most concerned about the answer was the entire Eastern seaboard. What does that mean if you are a property manager investing in assets on Miami beach? What does that mean if you are a seed developer who has seeds that are not going to be able to germinate at the rising temperatures in my home state of Illinois? If you are an investor, you would like to know the answers to those questions.
Many companies already make these disclosures, but more needs to be done. According to a 2017 KPMG study, half the world's largest companies are acknowledging climate change as a financial risk. Global Reporting Institute, a group that provides a comprehensive framework for companies of any size to report on their economic, environmental and social impacts, estimated that over 90 percent of the world's largest companies are already reporting on their sustainability impacts, and smaller companies are following suit.
There is much more that can be done. That is why the Climate Risk Disclosure Act is so important."
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