Should governments mandate climate risk disclosure for businesses?

Context

Climate risk disclosure mandates require businesses to publicly report financial risks from climate change—from physical hazards like flooding to transition costs from decarbonization. Governments and regulators worldwide are debating whether such transparency should be mandatory, with supporters arguing it prevents hidden liabilities and enables better investment decisions, while critics contend it imposes costly compliance burdens on companies. The debate intensified in 2026 as the U.S. SEC proposed rescinding Biden-era climate disclosure rules, even as some states like California pursued their own mandatory frameworks.