This video can be viewed at the below link.[1]

Hi, this is Gary Gensler and welcome to Office Hours.

What does the SEC have to do with climate? And why is the Chair of the SEC talking about climate?

Well you see, one of the most important innovations in our capital markets came along during the Great Depression, when we began requiring public disclosure of important information from companies that wanted to raise money from us.

The basic bargain is this: Investors get to decide what risk they wish to take. Companies though, that are raising money from us, have an obligation to share information with investors on a regular basis.

Now, the first disclosures, those revolved around companies’ financial performance. For example, how much revenue did the company have or profits last year or last quarter?

Then there was investor demand for information about who runs the company. Who is the president, who is the chief financial officer, and the like.

Later, investors wanted more information on how much of a company’s resources were dedicated to paying those executives.

Today, investors increasingly want to understand the climate risks of the companies whose stock they own or might buy.

And a lot of companies are already providing such information about climate risk. But investors representing literally tens of trillions of dollars are looking for more consistent and comparable information, so they can make informed decisions about where to put their money. And that money is often the money they are investing for us.

So, why am I talking about climate risk? Simple. Because investors are.

They want to know how climate-related risk will affect the companies they own. That could mean the physical risk associated with climate change, or it might be the steps those companies are taking to lower risk associated with regulation or commitments to lowering emissions.

This will be good for our economy. It helps companies raise money to promote economic activity.

And, yes, it will help investors put their money in companies that fit their needs.