Nasdaq Urges SEC Not to Move Ahead with Climate Disclosure Plan

Nasdaq Inc. is pushing back against the US Securities and Exchange Commission’s plans to make publicly traded companies reveal detailed information about their greenhouse gas pollution.

The stock-exchange operator urged the SEC to shelve its plans to require businesses to outline risks that a warming planet poses to operations in registration statements, annual reports or other documents. The mandatory disclosures that the agency proposed in March would place undue burdens on companies and ultimately cost investors, Nasdaq said on Wednesday.

“We are concerned that the proposal would impose additional complexity, costs and burdens on issuers, suppliers, and ultimately, investors, and thereby undermine the commission’s core goals,” Nasdaq said in the letter reviewed by Bloomberg News. The SEC, instead, should consider letting firms take a more voluntary approach.

Nasdaq’s concerns over the plans are among the first in a barrage that companies are expected to air before a deadline later this week. The proposal has also drawn the ire of Republican politicians, who argue the regulations are outside the SEC’s jurisdiction.

However, liberal lawmakers, environmental advocates, some investor groups, and Democrats at the SEC say the information is needed to make informed financial decisions.

Nasdaq specifically asked the regulator not to require larger companies to disclose so-called Scope 3 emissions, which are generated by other firms in their supply chain or customers using their products. Business groups say that information is particularly hard to quantify.

In addition, the exchange operator also wants the regulator to offer companies legal safe harbors and exemptions for special purpose acquisition companies.

The SEC said in an emailed statement that the agency “benefits from robust engagement from the public and will review all comments submitted during the open comment period.”

Nasdaq said its comments were based on a recent poll of 263 public companies listed on its exchange. Nearly 65% of those companies said they would favor the “comply-or-explain” voluntary approach.

Photo: Pedestrians are reflected in a window of the Nasdaq MarketSite in New York on June 15, 2022. Photographer: Michael Nagle/Bloomberg