Sweden’s Seventh AP Fund (AP7) has voiced its opposition to the US Securities and Exchange Commission’s (SEC) proposal to rescind the climate disclosure rules adopted in 2024.

It argued that removing the rules would risk impairing investors’ ability to assess climate-related financial risks and make informed investment decisions.

The SEC proposed rescinding its climate-related disclosure rules, which have not yet entered into force amid ongoing legal challenges, in June.

Its rules would require listed companied to provide standardised disclosures on climate-related risks, governance, greenhouse gas emissions, and transition plans in their public reporting.

The agency has argued that the rules exceed its statutory authority and impose costs that are disproportionate to their benefits.

In its response, AP7 highlighted that climate change presents significant financial risks and opportunities that impact companies’ value creation and long-term returns.

More than 60 per cent of the pension fund’s equity holdings are invested in North American companies.

AP7 noted that climate reporting by US companies was often less comprehensive and comparable than reporting by companies in other regions, and argued that rescinding the rules would make relevant information more difficult and costly for investors to obtain.

"Comparable and reliable climate reporting is an important prerequisite for investors to assess risks, make informed investment decisions and contribute to an efficient allocation of capital,” said AP7 head of sustainability, Charlotta Dawidowski Sydstrand.

The pension fund has therefore urged the SEC to withdraw its proposal to rescind the climate disclosure rules.

---