What 2 Supportive Commenters Say About SEC’s Climate Regulations

The Consumer Federation of America and the Investment Adviser Association have different goals and objectives, but both organizations voice support for the SEC’s proposed climate disclosure regulations.

The extended public comment period for the Securities and Exchange Commission’s proposed climate impact disclosure regulations has now drawn to a close, and the regulator is hard at work digesting the more than 5,000 comments filed by individuals, institutional investors, asset managers and many other stakeholders in the financial services ecosystem.

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Given the volume of commentary, it will take time for the full scope of the public feedback to be appreciated by SEC observers and the regulator’s own staff. However, even a cursory review of the published letters shows the comments come from a wide variety of perspectives and positions, with commenters ranging from anonymous individuals to midsize advisory shops to some of the biggest and most influential asset managers in the world. 

Some of the letters voice outright opposition to the notion of the federal government mandating the disclosure of climate-change-related information of any kind. On the other hand, many more of the letters appear to acknowledge the increasing importance of climate-related data and insights when it comes to individual and institutional investors’ decisions. That said, while many of the letters argue the SEC is the appropriate regulator to be addressing this issue, others see the ambitious regulatory package proposed earlier this year as a step beyond the SEC’s traditional purview.

Two groups that publicly filed supportive comment letters about the SEC’s ambitious regulations are the Consumer Federation of America, which advocates for the rights and fair treatment of U.S. consumers, and the Investment Adviser Association, which advocates on behalf of the fiduciary investment adviser industry. The two organizations operate under a very different set of goals and principles, but their comments regarding the SEC’s climate regulations share some key similarities—including offering broad support for the direction in which the SEC is heading.

In its letter, the IAA says it agrees with the SEC that the provision of “more consistent, comparable and reliable ESG disclosures” of material information by registrants will allow investment advisers to better serve their clients by improving transparency for investors and facilitating apples-to-apples analysis and comparison of registrants.

“We also believe that this will in turn lead to better and more accurate pricing of risks, and thus largely support the proposal,” the letter states. “We agree with the Commission that these rules should require presentation of climate-specific financial information on a separate basis and not specify particular time periods for time horizons but instead issue guidance. In addition, we recommend that any rules that the Commission adopts balance flexibility for registrants and standardization of disclosures; eliminate certain proposed prescriptive board oversight requirements; and provide additional examples of physical and transition risks.”

The IAA’s letter states that the organization agrees with the proposed requirement that registrants disclose Scopes 1 and 2 greenhouse gas emissions data, which involves the emission of greenhouse gases more or less directly by the company in question. The IAA also voices is support for the requirement that larger reporting company registrants obtain attestation for Scopes 1 and 2 greenhouse gas emissions. However, the IAA voices opposition to the requirement that registrants disclose Scope 3 emissions data. As commonly defined, Scope 3 emissions are those produced as a result of activities from assets not owned or controlled by the reporting organization, but that the organization impacts in its value chain and business operations.

“We recommend that the Commission not require registrants to disclose their Scope 3 GHG emissions at this time due to data gaps and the absence of agreed-upon measurement methodologies,” the letter states. “Should the Commission nevertheless require disclosure of Scope 3 GHG emissions, we recommend that it only require disclosure of Scope 3 GHG emissions when they are material, and not require disclosure if the registrant has set an emissions target or goal that includes those emissions.”

With respect to all required climate-related disclosures, the IAA recommends that the SEC clarify the standard for materiality to be used. The letter also recommends that the SEC require GHG emissions attestation providers to have familiarity with the specific industry of the registrant for which the attestation report is being provided.

The Consumer Federation of America’s comment letter speaks directly to the question of the SEC’s authority to pursue these regulations.

“Taking these steps is not only well within the Commission’s authority, but also essential if the Commission is to fulfill its public interest mission to protect investors, promote fair, orderly and efficient markets, and facilitate capital formation,” the letter states. “We encourage the adoption of the proposed amendments without undue delay.”

According to the CFA, factors driving demand for better climate-related disclosures can vary, but of principal significance is the growing consensus that climate change may present a systemic risk to financial markets.

“This concern is detailed in the recent report of the Climate-Related Market Risk Subcommittee of the Market Risk Advisory Committee of the Commodity Futures Trading Commission,” the CFA letter points out. “The report was unanimously approved by the subcommittee’s 34 members, who represent banks, asset managers, agribusiness, the oil and gas sector, academia and environmental organizations. This concern is widely acknowledged across virtually all segments of the economy in general and the financial system in particular.”

The CFA’s letter further notes that both retail and institutional investors are demanding better climate-related disclosures that can inform better investment decisionmaking.

“First, institutional investors are explicitly demanding enhanced climate-related disclosures because they know that climate-related risks and opportunities can affect returns,” the letter continues. “Second, they are demanding enhanced climate-related disclosures so that they can offer investment products and services that meet their clients’ needs and goals.”

The CFA letter suggests that while investor focus is appropriately centered on the downside financial risks of climate change, it is equally important to highlight the benefits that investors seek via better climate-related information.

“Where markets and economies are decarbonizing, both retail and institutional investors need reliable information to determine the effects of this process on registrants,” the CFA letter concludes. “Investors have demonstrated that they need climate-related information when making decisions about how best to allocate their capital—whether to buy, hold or sell a company’s shares, and how to vote their proxies. To do so, they need information about companies’ plans related to climate change and the potential cost of those plans.”

The ‘Why’ Behind OneDigital’s New Wealth Management Partnerships

In collaboration with firms including BlackRock and PIMCO, OneDigital plans to offer employees solutions and investment advice specific to their financial situation.



OneDigital Investment Advisors has announced a collection of partnerships through which it intends to enhance its expansion into wealth management, financial planning and investment management for individuals and families of all ages and income levels.

OneDigital already provides financial planning services to the masses through retirement plans, but the expanded wealth management capabilities are aimed at allowing OneDigital to provide “simple yet customized” investment models to the mass affluent marketplace. According to a press release announcing the partnership, the firm will be able to provide specialized investment strategies and private alternatives to high-net-worth individuals.

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The offering includes customized model solutions and separately managed accounts from investment managers including BlackRock, Day Hagan/Ned Davis Research, PIMCO, Avantis Investors and Newfound Research. The new approach is based on technology partnerships with Parametric and 55ip, and it features an end-to-end alternative investment solution from iCapital.

“It is our goal to increase access to personalized financial advice and better support people of all ages and incomes,” Vince Morris, president of retirement and wealth at OneDigital, said in the release. “This expanded offering prioritizes access to personalized advice and the level of support that individuals need to live their best life now and into the future.”

Speaking with PLANADVISER, Morris says OneDigital has built a strong relationship with many employers as a trusted retirement plan adviser—with the firm now covering more than a million employees. Thanks to the partnerships negotiated with the various institutional asset money managers, Morris says, OneDigital will be able to offer employees custom solutions specific to their financial situation.

“People want this type of advice through their employer,” Morris says. “And we have a mechanism to allow that employer to offer financial advice down through the employee ranks.”

OneDigital has developed a differentiated investment approach utilizing a proprietary asset allocation algorithm that aligns individuals with a blend of customized strategies through its partnering managers, the release says. This approach will be deployed directly to individuals as well as through financial engagement with corporate clients supporting the financial wellbeing of their employees. 

“Our people-first financial planning approach combines the ability to easily curate and monitor custom portfolios and blend the strategies provided by our partnering managers. Creating custom portfolios and aligning them with our client’s financial goals is the next generation of investment management,” Saumen Chattopadhyay, chief investment officer at OneDigital, said in the release. “We look beyond the individual’s risk level and time horizon through a planning process. Our relationships with leading managers and technology partners will allow for a new level of both simplicity and customization.”

Morris says the two main questions many American families have today are how they are going to pay for health care and whether they are saving enough for retirement.

“We think we can bring together a platform or offering in the marketplace that address more of a holistic financial approach to health care and health care needs and financials,” Morris says. “There’s a connectivity there in our belief system that says you can’t upgrade healthcare if you don’t have financial stability, and if you don’t have financial stability, you can’t upgrade health care. Those two things are interlinked, and that’s what we are solving for.”

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