Mandatory Corporate Climate Disclosures: Now, but How?

Armour, John, Luca Enriques, and Thom Wetzer. "Mandatory Corporate Climate Disclosures: Now, but How?". SSRN Electronic Journal. (1636934400)November 15, 2021. https://doi.org/...

Companies are not required to disclose the information that investors need to price climate risk.  Voluntary frameworks, like the Task Force on Climate-Related Financial Disclosures (TCFD), do not bring about the necessary change.  This has led to mispricing climate risk and capital misallocation, which harms investors and delays the transition to net-zero carbon neutrality.  This paper argues for mandatory corporate climate disclosures and suggests the regulatory architecture that supports such a disclosure regime.  It outlines design principles to establish metrics against which government proposals can be evaluated in support of their efforts and to call out policy greenwashing.

Posted on 19/11/21