MBA Weighs In With SEC on Climate-Related Disclosures

Adrian Ballinger is Policy Advisor with the Commercial Real Estate Finance team with the Mortgage Bankers Association. He can be reached at aballinger@mba.org.

The Mortgage Bankers Association last week urged the Securities and Exchange Commission to follow a set of guiding principles as it considers climate-related disclosures.

The letter said as the SEC gathers information and determines the best ways to facilitate the disclosure of consistent, comparable and reliable information on climate change, it should continue to follow the following principles that have guided its work thus far.

Those principles include:

• Clearly distinguishing between climate-change risk and ESG (environmental, social and governance) standards;
• Focusing on the SEC’s statutory mission and authority;
• Applying a principles-based vs. a prescriptive approach;
• Employing an iterative and interactive process;
• Balancing cost and benefits of any disclosure; and
• Harmonizing efforts with other standard setters.

MBA also offered to serve as a future resource for the SEC on climate-related matters. “While we are still in the early days of the development of a consensus on the salient data and models on climate-change risk and ESG, we would be happy to serve as a resource as these markets develop,” the letter said.

MBA is active in the climate change/ESG space, including forming a Commercial Real Estate Finance Green Lending Roundtable and working with MISMO, the real estate finance industry’s standards organization, to facilitate the development of green lending and ESG standards, including data, terms and definitions.

MBA offered these recommendations in response to a March 15 SEC request for input. The SEC sought input to inform its staff evaluation of disclosure rules “with an eye toward facilitating the disclosure of consistent, comparable and reliable information on climate change.”