CFTC Consults on Climate Risk

Climate risk has become a pressing regulatory concern. In March 2022, the SEC proposed long-awaited rules for climate risk disclosures by public companies; in May, it proposed enhanced disclosure rules for certain investment advisers and investment companies on their environmental, social and governance practices. The CFTC recently moved in that direction, issuing a request for information (RFI) pertaining to climate-related financial risk relevant to the derivatives markets and the underlying commodities markets. The RFI solicits information in ten broad areas, including data; analysis and testing; risk management; disclosure; product innovation; voluntary carbon markets; digital assets; financially vulnerable communities; public-private partnerships; and CFTC capacity and coordination. This article examines the information solicited by the RFI, the context for the request and the views of the individual Commissioners, two of whom expressed concern that the agency could be stepping outside its regulatory boundaries. See our two-part coverage of the SEC’s proposed climate risk disclosure rules: “Five Key Elements” (May 19, 2022); and “Implications, Challenges, Timing and Pushback” (May 26, 2022).

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