Survey Reveals Retail Investors Want SEC to Require Climate Disclosure

Washington, D.C.Seventy percent of investors support the Securities and Exchange Commission (SEC) requiring all public corporations to disclose standardized information about their financial risks due to climate change. This finding comes from a new nonpartisan survey of investors completed by Embold Research on behalf of Americans for Financial Reform Education Fund and Public Citizen. 

The survey also found that 65% of investors across the United States believe it is important for corporations, banks, and other financial institutions to disclose information to investors about their climate change risks and strategy. The results from this survey were submitted as a comment to the SEC in response to their proposed investors protections on climate-related financial disclosures. 

To make smart and sustainable investment decisions, investors have said that they need more standardized, reliable information about companies’ growing climate financial risk. That includes their contribution to climate change and their plans for remaining viable in a low-carbon economy. 

Fifty-eight percent of investors say they would be likely to factor in information about an investment’s financial risks and opportunities related to climate change if that information was standardized, free, and easy to find, an outcome the SEC can ensure by finalizing its recent proposal. 

“It is clear that there is strong, unmet investor demand for comparable, credible information regarding companies’ climate-related financial risks,” said Jessica Garcia, climate finance policy analyst at Americans for Financial Reform Education Fund. “Investors don’t trust voluntary disclosures. To aid their investment decisions, they want this information filed with the SEC and audited by a third party, which would cut back on the unchecked greenwashing we’ve seen in recent years and inject a higher level of transparency and standardization across disclosures.”

The survey found that only 36% of investors trust voluntary disclosures, whereas 58% of investors would trust disclosures to the SEC, and 71% of investors would trust these disclosures if submitted to the SEC and validated by a 3rd-party auditor. 

“Retail investors are more likely to rely on publicly available information contained in 10-K statements, and voluntary sustainability reports lack the granular details about climate risk that a comparable and transparent set of disclosures would provide,” said Tracey Lewis, policy counsel at Public Citizen. “Retail investors are also less likely to have the resources to investigate and research company statements the way institutional investors can. For this reason, the proposed rule also puts market participants on a more level playing field.”

Two thousand six hundred twenty-one surveys were completed by current (n=2532, 97%) and future investors (n=89, 3%) nationwide between March 18 and 29, 2022, by Embold Research. They have modeled a margin of error of +/- 3.04%. Future investors indicated they expected to begin investing within the next 5 years. Given the small sample of future investors, excluding future investors does not change any of the above statistics by more than 1 percentage point.