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June 10, 2021

Jupiter Urges SEC to Mandate Quantification and Disclosure of Climate Change-Related Risks

“In this new environment—filled with fast-moving shifts in climate policy—it is critical to implement superior climate risk management strategies, train boards and senior management to address this material risk, and craft measures to conduct scenario analyses at the highest level. The prosperity and future of global corporations, the economy, and our planet depend on it.”

—Rich Sorkin, CEO of Jupiter

Noting “climate change is already threatening the stability of the U.S. financial system, and nearly every critical infrastructure sector,” Jupiter CEO Rich Sorkin has strongly urged the Securities and Exchange Commission to mandate the disclosure of material climate-related risks in financial filings.

In a June 11 letter to SEC chair Gary Gensler responding to a call for input into the issue of climate-change risk disclosure, Mr. Sorkin cautioned that—despite warnings from the Federal Reserve and CFTC—many organizations today have no true understanding of current or future climate vulnerability. He emphasized that “climate risk disclosure is a first step in accelerating investments in emissions reductions and resilience.”

In addition, Mr. Sorkin noted that tools, metrics, and data exist today to probabilistically project physical impacts of climate change on both portfolios and individual assets, and that standards and best practices are emerging to optimally assess physical climate risk and develop resilience and mitigation strategies. He urged that the SEC also require corporations to incorporate future physical risk to assets in climate-related disclosures.

“Undertaking this step alone would represent enormous progress … U.S. financial regulators must move swiftly to understand, measure, and address those risks,” he said, calling for “corporate action and leadership … to move to the forefront of physical climate risk management and disclosure.”

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