President Joe Biden is preparing to sign an executive order that would require companies to submit “climate confessions,” or a list of risks they face from climate change along with their greenhouse gas emissions, according to special climate envoy John Kerry.
The inquisition seemed to be directed toward shaming and applying financial pressure on those who do not meet the administration’s discretionary demands, according to the Washington Examiner.
Kerry and other top policymakers hinted that the pressure might apply not just to the companies themselves but to banks, outside investors and corporate partners, who could be punished with extra scrutiny simply for doing business with the climate scofflaws.
“Suddenly, people are going to be making evaluations considering long-term risks to their investment based on the climate crisis,” Kerry explained at a recent event hosted by the International Monetary Fund.
“And that will encourage new investment, as well as laws in countries,” such as tax incentives to support clean energy technologies, he added.
Kerry made the remarks after IMF Managing Director Kirstalina Georgieva called for standardizing global climate disclosures.
“We have to make the invisible visible—the transition risk that banks are carrying because they’re invested in high-carbon activities that, over time, are going to be phased out and the physical risks, investments in highly vulnerable coastal areas or in agriculture that could be affected by floods or droughts,” Georgieva said.
Republicans, however, have slammed Kerry’s climate disclosure proposal as an attempt to choke off capital to the fossil-fuel industry.
“If the Biden administration was being honest with Congress and the American people, this is really not about managing climate risk. It’s not about managing financial stress,” Rep. Andy Barr, R-Ky., said. “It’s about causing financial stress to fossil energy businesses.”
But the Securities Exchange Commission is already preparing to launch a new oversight force task to enforce Biden’s disclosure requirement, according to SEC acting chair Allison Herren Lee.
“Now more than ever, investors are considering climate-related issues when making their investment decisions. It is our responsibility to ensure that they have access to material information when planning for their financial future,” Lee said in a statement earlier this year.