The House Financial Services Committee advanced a bill on Wednesday that would require public companies to report more information about their climate change risks. It's not yet clear when the full House could take up the bill.

Supporters argue the Climate Risk Disclosure Act will allow people to assess climate-related risks and make more informed investment decisions, which could help speed up the market transition from fossil fuels to more sustainable energy sources.

"We need to make sure that our private sector understands when they are investing in ways that complicates that risk — and therefore is going to reduce their long-term return and when they're investing in a way that will hedge that risk or maybe even eliminate it," said Rep. Sean Casten (D., Ill.) in an interview with Yahoo Finance. "It's about making sure that we harness the full power of the private sector to address this massive existential threat, both to the ecology of our planet and to the stability of our financial system."

The legislation would direct the Securities and Exchange Commission to issue rules within two years that would require every public company to disclose:

• Direct and indirect greenhouse gas emission

• The total amount of fossil-fuel related assets it owns or manages

• How its valuation would be affected if climate change continues at its current pace or if policymakers successfully restrict greenhouse gas emissions to meet the 1.5 degrees Celsius goal

• Its risk management strategies related to the physical risks and transition risks posed by the climate crisis

Casten introduced the bill in the House and Sen. Elizabeth Warren (D., Mass.) is leading an effort to advance the bill in the Senate.

During the committee debate on Wednesday, Republicans raised concerns about how the climate risks would be defined and how disclosures would be reported. Rep. Andy Barr (R., Ky.) questioned the "workability" and "practicality" of the disclosure requirements and if they could discourage some companies from expanding or going public.

"These onerous disclosures are going to be a huge disincentive for acquisitions," said Barr.

"There are lots of complicated issues that companies deal with, but they rely on outsiders to define the rules of the road," said Casten. "All this bill is really doing is saying, we need a consistent set of rules of the road."

Rep. French Hill (R., Ark.) said Republicans aren't necessarily opposed to some sort of disclosure requirements, but the current proposals aren't consistent or well-defined.

"Republicans want to get this issue right," said Hill. "Consistent with cost-benefit analysis and consistent with verifiable relevant and effective information for our investors."

Last year, the Task Force on Climate-Related Financial Disclosures — which was established by the Financial Stability Board in 2015 to increase reporting of climate-related financial risks — found most of the world's 100 largest public companies support its disclosure recommendations. The task force saw an 85% jump in support from 2019.

Companies did highlight concerns about a lack of standardized metrics and the possibility of revealing confidential information.

Regulators including the SEC are already looking rules to make companies disclose more about their climate risks. SEC Chairman Gary Gensler recently told lawmakers he expects to propose new rules on corporate climate risk disclosures in the second half of this year.

The SEC has asked for input from the public about what climate change information public companies should be required to report. The deadline for answers is in June.

Casten told Yahoo Finance when he introduced the bill under the Trump administration, he was trying to compel the SEC to act. Now, he says he's pleased that the agency is moving on this issue, but he still wants to pass legislation.

"What we're trying to do with them [the SEC] is to make sure that we pass something legislatively so that the necessary actions they are taking to protect our economy and to protect the planet have the strength of law behind it — and aren't fickle and bounce back and forth with future changes in the occupant of the White House," said Casten. "I think it's important for us as a species, much less as a legislature, to make sure as much as we can that we are hand in glove between the legislative branch and the executive branch."

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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