SEC's Crenshaw sees potential overlap in EU-US climate rules

Europe’s forward momentum on climate disclosure rules is highlighting the need for U.S. regulators to think about how publicly traded companies operating globally can navigate multiple and potentially overlapping regulatory regimes, said Caroline Crenshaw, one of three Democratic commissioners at the Securities and Exchange Commission.

“The closer they are together, the more likely, from the SEC perspective, we are to think about substitute compliance,” Crenshaw said during remarks at Bloomberg's Sustainable Finance Forum in New York Wednesday.

The Securities and Exchange Commission teed up a sweeping proposal in March 2022 intended to standardize the types of disclosures public companies make about greenhouse gas reduction goals, and the risks and opportunities presented by a changing climate. The watchdog agency has said investor demand for the information, as well as better tools to meaningfully draw comparisons between companies, is driving the rulemaking.

Caroline Crenshaw said that despite becoming mired in political fights over climate change, the rule itself isn’t political. “It is the bread and butter of the agency” and about responding to changing demands in the market for information, she said.

The proposal has yet to be finalized and may not be taken up for a final vote for many months still.