Raphael Stevens

The Securities and Exchange Commission voted 3-2 on Wednesday to issue a final rule about climate disclosures.
The regulation requires a baseline transparency around climate risks and greenhouse gas emissions from certain U.S. publicly listed companies.
It is watered down from the initial version proposed in March 2022. So-called Scope 3 emissions were stripped out, for example.

Securities and Exchange Commission Chairman Gary Gensler testifies before Congress on July 19, 2023.
Win Mcnamee | Getty Images News | Getty Images

Climate disclosures aren’t mandatory under the current regime; companies make them voluntarily. They remain “uncommon in all but a few sectors,” according to S&P Global.
The largest companies must start making some climate disclosures as early as fiscal 2025 and about greenhouse gas emissions as soon as fiscal 2026.

‘A sensible rule to protect investors’

“Climate risk is financial risk,” Elizabeth Derbes, director of financial regulation and climate risk for the Natural Resources Defense Council, said in a written statement.
“This is a sensible rule to protect investors: it gives them access to clear, comparable, relevant information on the measures companies are taking to manage climate risks and opportunities,” Derbes said.

Overall, transparency around climate risk may be essential for investors to gauge if a company’s stock is worth holding or if its stock price is reasonable, experts said — for example, is it too expensive given high exposure to climate risk, or perhaps fairly priced considering it’s well positioned?
Required disclosures include climate risks that have had — or are reasonably likely to have — a material impact on company business strategy, operations or financial condition, according to the SEC.
They also include a company’s climate-related goals, transition plans, and costs and losses related to events like hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures and sea-level rise, the SEC said.
“Investors want to be able to accurately price those risks and opportunities as they look medium and longer term at their investments,” especially retirement investors who may have a timeline decades in the future, Rachel Curley, director of policy and programs at the U.S. Sustainable Investment Forum, recently told CNBC.

Rule does not include ‘Scope 3′ disclosures

However, the rule is watered down from its initial version. Derbes and other observers say that dilution hinders investors’ ability to accurately gauge risk.
For example, the final rule stripped out a requirement to disclose so-called Scope 3 greenhouse gas emissions. Such planet-warming emissions are those along a corporation’s value chain like suppliers of raw material or by customers using a company’s products.
For many businesses, Scope 3 emissions account for more than 70% of their carbon footprint, Deloitte estimates.

“This is not the rule I would have written,” Crenshaw said, citing omissions such as Scope 3 reporting. “They are a bare minimum,” though ultimately better than no rule at all, she added.
Instead, the final rule will require companies report Scope 1 and 2 emissions if they’re deemed material to investors. These are direct emissions caused by company operations and indirect ones from the purchase of energy (from renewable sources or coal-burning power plants, for example).
Only “large accelerated filers” and “accelerated filers” must disclose Scope 1 and 2 emissions. These categories include corporations with an aggregate global market value of $700 million or more, and $75 million or more, the SEC said.

Challenges could be forthcoming

The rule comes as the Biden administration pledged to cut U.S. greenhouse gas emissions in half by 2030. In 2022, President Joe Biden signed the Inflation Reduction Act, the largest federal investment to fight climate change in U.S. history.
It also follows other U.S. and international climate disclosure regimes, such as in the European Union and rules recently passed in California.
Congressional and legal challenges to the rule “are likely,” Jaret Seiberg, financial services and housing policy analyst at TD Cowen, wrote last week in a research note.
While proponents say the SEC rule is well within the scope of its mission to protect investors, others say the agency overstepped its authority.
The rule is “climate regulation promulgated under the Commission’s seal,” and “hijacks” the agency to promote climate goals, SEC Commissioner Mark Uyeda said before the vote Wednesday.
Last year, a group of House and Senate Republicans sent a letter to SEC Chair Gary Gensler criticizing the proposal, saying it “exceeds the [agency’s] mission, expertise, and authority.”
Gensler defended the rule as being consistent with a “basic bargain” in U.S. securities laws.
“Investors get to decide which risks they want to take so long as companies raising money from the public make … ‘complete and truthful disclosure,'” Gensler said in a written statement following the vote. “Over the last 90 years, the SEC has updated, from time to time, the disclosure requirements underlying that basic bargain.”
Don’t miss these stories from CNBC PRO: More

In prepared remarks for appearances on Capitol Hill, Fed Chair Jerome Powell said policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly.
“The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,” the central bank leader said.
Powell noted again that lowering rates too quickly risks losing the battle against inflation and likely having to raise rates further, while waiting too long poses danger to economic growth.

Federal Reserve Chair Jerome Powell on Wednesday reiterated that he expects interest rates to start coming down this year, but is not ready yet to say when.
In prepared remarks for congressionally mandated appearances on Capitol Hill Wednesday and Thursday, Powell said policymakers remain attentive to the risks that inflation poses and don’t want to ease up too quickly.

“In considering any adjustments to the target range for the policy rate, we will carefully assess the incoming data, the evolving outlook, and the balance of risks,” he said. “The Committee does not expect that it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”
Those remarks were taken verbatim from the Federal Open Market Committee’s statement following its most recent meeting, which concluded Jan. 31.
During the question-and-answer session with House Financial Services Committee members, Powell said he needs “see a little bit more data” before moving on rates.
“We think because of the strength in the economy and the strength in the labor market and the progress we’ve made, we can approach that step carefully and thoughtfully and with greater confidence,” he said. “When we reach that confidence, the expectation is we will do so sometime this year. We can then begin dialing back that restriction on our policy.”
Stocks posted gains as Powell spoke, with the Dow Jones Industrial Average up more than 250 points heading into midday. Treasurys yields mostly moved lower as the benchmark 10-year note was off about 0.3 percentage point to 4.11%.

Rates likely at peak

In total, the speech broke no new ground on monetary policy or the Fed’s economic outlook. However, the comments indicated that officials remain concerned about not losing the progress made against inflation and will make decisions based on incoming data rather than a preset course.
“We believe that our policy rate is likely at its peak for this tightening cycle. If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in the comments. “But the economic outlook is uncertain, and ongoing progress toward our 2 percent inflation objective is not assured.”
He noted again that lowering rates too quickly risks losing the battle against inflation and likely having to raise rates further, while waiting too long poses danger to economic growth.
Markets had been widely expecting the Fed to ease up aggressively following 11 interest rate hikes totaling 5.25 percentage points that spanned March 2022 to July 2023.
In recent weeks, though, those expectations have changed following multiple cautionary statements from Fed officials. The January meeting helped cement the Fed’s cautious approach, with the statement explicitly saying rate cuts aren’t coming yet despite the market’s outlook.
As things stand, futures market pricing points to the first cut coming in June, part of four reductions this year totaling a full percentage point. That’s slightly more aggressive than the Fed’s outlook in December for three cuts.

Inflation easing

Despite the resistance to move forward on cuts, Powell noted the movement the Fed has made toward its goal of 2% inflation without tipping over the labor market and broader economy.
“The economy has made considerable progress toward these objectives over the past year,” Powell said. He noted that inflation has “eased substantially” as “the risks to achieving our employment and inflation goals have been moving into better balance.”
Inflation as judged by the Fed’s preferred gauge is currently running at a 2.4% annual rate — 2.8% when stripping out food and energy in the core reading that the Fed prefers to focus on. The numbers reflect “a notable slowing from 2022 that was widespread across both goods and services prices.”
“Longer-term inflation expectations appear to have remained well anchored, as reflected by a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets,” he added.
Powell is likely to face a variety of questions during his two-day visit to Capitol Hill, which started with an appearance Wednesday before the House Financial Services Committee and concludes Thursday before the Senate Banking Committee.
Questioning largely centered around Powell’s views on inflation and rates.
Republicans on the committee also grilled Powell on the so-called Basel III Endgame revisions to bank capital requirements. Powell said he is part of a group on the Board of Governors that has “real concerns, very specific concerns” about the proposals and said the withdrawal of the plan “is a live option.” Some of the earlier market gains Wednesday faded following reports that New York Community Bank is looking to raise equity capital, raising fresh concerns about the state of midsize U.S. banks.
Though the Fed tries to stay out of politics, the presidential election year poses particular challenges.
Former President Donald Trump, the likely Republican nominee, was a fierce critic of Powell and his colleagues while in office. Some congressional Democrats, led by Sen. Elizabeth Warren of Massachusetts, have called on the Fed to reduce rates as pressure builds on lower-income families to make ends meet.
Rep. Ayanna Pressley, D-Ohio, joined the Democrats in calling for lower rates. During his term, Democrats frequently criticized Trump for trying to cajole the Fed into cutting.
“Housing inflation and housing affordability [is] the No. 1 issue I’m hearing about from my constituents,” Pressley said. “Families in my district and throughout this country need relief now. I truly hope the Fed will listen to them and cut interest rates.”
Don’t miss these stories from CNBC PRO: More

Women and Wealth Events
Your Money

The gender pay gap and longer lifespans relative to men make it challenging for many women to save enough for retirement, experts said Tuesday at CNBC’s Women & Wealth event.
However, there are ways women can try to boost savings.

Momo Productions | Stone | Getty Images

Women face tough financial prospects in retirement.
About 50% of women ages 55 to 66 have no personal retirement savings, a higher share than men (47%), according to U.S. Census Bureau data. Those who do have retirement savings are less likely to have $100,000 or more (22% vs. 30%).

“The picture is pretty bleak for women” who don’t save enough for retirement, Cindy Hounsell, founder and president of the Women’s Institute for a Secure Retirement, said Tuesday at CNBC’s Women & Wealth event.

More from Women and Wealth:

Here’s a look at more coverage in CNBC’s Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.

Women’s retirement savings challenges

The typical woman earns a lower salary than men: about 82 cents for every dollar, according to the Pew Research Center. That gender wage gap, which has hardly improved in two decades, makes it harder to save for the future.
Meanwhile, women must stretch their savings further. A female retiring at age 65 will likely live another 21 years, nearly three years longer than men, according to the Employee Benefits Security Administration.
A retirement savings shortfall may mean women must cut back on the lifestyle to which they were accustomed to during their working years, said Marianela Collado, a certified financial planner and CEO of Tobias Financial Advisors, based in Plantation, Florida.

They may become burdens on their children if they have kids who can offer financial support, she said at the Women & Wealth event.

Compounding the problem: Caregiving, especially for a spouse, has a “more detrimental economic impact” on women, according to the National Institute on Retirement Security. The same can be said for divorce, it found.

Advice to get on track for retirement

However, there are ways women can try to bolster their nest egg.
At a high level, they can improve their cash flows by increasing money coming in (i.e., income) and decreasing what goes out (i.e., spending), Collado said.
For example, if women think they’re underpaid, they can sit down with their managers at work, inquire about opportunities for growth and find avenues for higher earning potential, Collado said. Show managers where you add value and try to get fair compensation, she added.
That may be easier to do in certain states due to growth in pay transparency laws, which require that employers disclose a salary range for job listings.

Additionally, women can do a personal spending audit on an annual basis and cut budget items that don’t add long-term value, Collado said. Scrutinize spending that’s on “autopilot,” such as automatic charges, she said.
Women should also examine their workplace benefits to determine which are applicable, Collado said.
For example, don’t leave free money on the table by not getting a company’s full 401(k) match, she said. The self-employed can also set up their own 401(k) plan. Those without any access to a workplace retirement plan can save in individual retirement accounts or other types of savings accounts, she said. More

Pan Gongsheng, governor of the People’s Bank of China, told reporters Wednesday there was room to further cut banks’ reserve requirements — the amount of cash they need to have on hand.
He was speaking at a press conference with other key leaders of the country’s economy and financial sector on the sidelines of this year’s annual parliamentary meetings.
This year, China will “continue to strengthen macroeconomic policies,” said Zheng Shanjie, chairman of the National Development and Reform Commission, the country’s economic planning agency.
At the press conference, China’s Minister of Finance Lan Fo’an told reporters the local debt situation is “controllable” overall.

China’s central bank governor said there was room to further cut banks’ reserve requirements, and pledged to utilize monetary policy to prop up consumer prices.
Bloomberg | Bloomberg | Getty Images

BEIJING — The heads of China’s central bank and economic planning agency signaled that authorities would be willing to take further steps to support growth, but did not announce any large-scale stimulus plans.
Pan Gongsheng, governor of the People’s Bank of China, told reporters Wednesday there was room to further cut banks’ reserve requirements — the amount of cash they need to have on hand. He also pledged to utilize monetary policy to “mildly” prop up consumer prices, according to CNBC’s translation of his Mandarin-language remarks.

Pan was speaking at a press conference with other key leaders of the country’s economy and financial sector on the sidelines of this year’s annual parliamentary meetings.
The leaders defended China’s growth target of around 5% for the year, while adhering to a 3% fiscal deficit.
In an annual government work report released on Tuesday, Premier Li Qiang promised to transform the world’s second-largest economy, which is facing a slew of economic challenges including a real estate slump, high levels of local government debt, deflation and weak consumer demand.
Yet, the work report fell short of many analysts’ expectations for further stimulus and raised questions about how China would be able to achieve another year of growth that’s around 5%.
National GDP rose by 5.2% in 2023, up from a low base in 2022 as China emerged from its stringent “zero Covid” measures. China’s consumer prices saw their biggest drop in January since 2009, while producer prices declined for a 16th month — underscoring the depth of the challenge that Beijing faces in reflating the world’s second-largest economy.

Still, Pan said China has ample monetary policy tools at its disposal, and pledged to push for lower financing costs in the months ahead.
The PBOC last cut reserve ratio requirements for banks by 50 basis points from Feb. 5, which provided 1 trillion yuan ($139.8 billion) in long-term capital. It was a much larger cut than analysts expected.

Boosting growth

This year, China will “continue to strengthen macroeconomic policies,” said Zheng Shanjie, chairman of the National Development and Reform Commission, the country’s economic planning agency.
He noted how this would involve coordination of fiscal, monetary, employment, industrial and regional policies, as China continues to step up macro economic policy adjustment.
“Of course, we clearly see that in the process of achieving the expected targets, there are still many difficulties and problems,” Zheng said, according to CNBC’s translation of his Mandarin-language remarks.
He noted how the “external environment may become more complex and severe.” Domestically, there may be problems in China’s efforts to remove provincial barriers to doing business by creating a “national unified market,” he added.
Zheng also said there was fierce competition in some industries, production and operating difficulties for certain businesses, as well as persistent risks in other areas. He did not mention real estate by name.
China’s Commerce Minister Wang Wentao said foreign trade faces a severe situation this year.
Zheng, the NDRC chief, said China’s exports for the January-February period increased by 10% from a year ago, but did not specific if this was in Chinese yuan or U.S. dollar terms. The next tranche of trade data is due to be released Thursday.

Bonds, debt and domestic demand

At the press conference, China’s Minister of Finance Lan Fo’an told reporters the local debt situation is “controllable” overall.
He said local government debt levels declined after his ministry’ work last year, and they are working on a longer term mechanism to resolve the issue of hidden bad debts, while seeking to defuse the issue with a range of measures.
The “ultra long” special treasury bonds announced in Tuesday’s government work report was the rare surprise and only the fourth time they have been issued since the 1990s.
NDRC chief Zheng told reporters these bonds will support technological innovation, energy securities and other key areas — which are among President Xi Jinping’s “new productive forces” spelt in the work report.
He also said policy plans for equipment upgrades will help boost consumption in the world’s second largest economy and create a market of more than 5 trillion yuan (about $694.5 billion). He said this plan would include home appliances and vehicles, among others.
China’s economy has been dragged down by lackluster consumption, as the real estate market slump, debt risks and stock market declines weigh on confidence.
Boosting domestic demand is the third-ranked task of the list of 10 economic priorities in the Chinese government’s plan for this year, underscoring the severity of the matter.
For investors in the near term, the primary concern remains how much China’s policymakers are focused on ensuring growth.
“In order to achieve this [target of around 5%], the government work report proposed many major policies,” Huang Shouhong, head of the report’s drafting team and director of the State Council’s research office, told reporters on Tuesday in Mandarin, translated by CNBC.
“If China’s economy encounters unexpected shocks in the future, or the international environment undergoes unexpected changes, we still have tools in reserve in our policy toolbox,” he said. More

China’s top securities regulator Wu Qing vowed to crack down on fraudulent investors and companies.
Wu outlined measures deemed necessary to improve the quality of listed companies, which included encouraging listed companies to improve stability, as well as timeliness and predictability of dividend payouts.
At the same meeting, China’s central bank governor Pan Gongsheng pledged support for overseas listings for high-quality Chinese companies.

Wu Qing, Chairman of the China Securities Regulatory Commission, answers a question at a press conference during the second session of the 14th National People’s Congress (NPC) in Beijing on March 6, 2024. (Photo by WANG Zhao / AFP) (Photo by WANG ZHAO/AFP via Getty Images)
Wang Zhao | Afp | Getty Images

BEIJING — China’s top securities regulator vowed to “strictly” crack down on market manipulators, while stating that protecting small investors was a “core task.”
Ensuring fairness, especially in a market dominated by smaller investors, is the regulator’s core task, said Wu Qing, chairman of the China Securities Regulatory Commission, on Wednesday at a joint press conference alongside the country’s other top economic and financial planners.

Wu outlined measures deemed necessary to improve the quality of listed companies and increase returns on investment. They include: encouraging listed companies to improve stability, timeliness and predictability of dividend payouts, stricter delisting rules, and expanding inspections of listed companies.
He said that openness, fairness and justice should be the most important principles in the capital market.
“China’s market is the second largest in the world, but it’s not as strong,” Wu said, adding the recent market volatility exposed deep-seated issues.
He said investors need to be better protected, so they can have confidence and trust. It would also attract longer term investors, he added.
At the same press conference, Pan Gongsheng, governor of the People’s Bank of China, also pledged support for overseas listings for high-quality Chinese companies.

Struggling markets

Following recent extreme market volatility, Beijing has stepped up measures to support its beleaguered stock markets in the last few weeks.
These include tightening regulatory restrictions on its rapidly booming quant trading industry and curbing short selling, changing its top securities regulator and share purchases by a “national team.”
The appointment of markets veteran Wu as chairman of the China Securities Regulatory Commission in early February preceded the curbs on quant traders.

A securities business hall in Fuyang, China, in December 2023.
Costfoto | Nurphoto | Getty Images

Wu is known as “Broker Butcher” for his crackdown on traders in his previous roles as acting vice mayor of China’s major financial hub Shanghai and chairman of the Shanghai Stock Exchange.
The Hang Seng Index, a benchmark of Hong Kong listings that includes many offshore Chinese stocks, is coming off four-straight annual losses, while the CSI300 index of the largest blue chips listed in the mainland has booked losses for three straight years.
With the mainland property market in the doldrums and the stock markets in freefall, desperate mainland investors had looked elsewhere for better returns despite stringent capital controls.
At last year’s parliamentary meeting, Beijing had announced an overhaul of finance and tech regulation by establishing party-led commissions to oversee the two sectors as Xi Jinping gained an unprecedented third term as president. More