The Securities and Exchange Commission voted Monday 3-1 in favor of a proposed rule that would expand and standardize how public companies disclose business risks related to the climate and greenhouse gas emissions.

“Investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions,” SEC Chair Gary Gensler said in a statement.

Under the proposal, SEC registrants would have to provide information in filings about, among other things, oversight of climate risks, impact of those risks on business and financial statements, and any climate-related targets or goals. Climate-related risks, as defined in the proposal, are the negative effects of climate events on business operations or activities within the company’s value chain.

In addition, the SEC is seeking GHG emissions data related to direct business operations and energy use, and in some cases, value-chain operations. Standardizing how and when companies provide emissions data would remove uncertainty associated with voluntary reporting, according to the proposed rule.

GHG disclosures expressed as metric tons of carbon dioxide-equivalent per unit of revenue, for example, would give investors a basis for comparison across industries and companies, the commission said.

Jack Lienke, regulatory policy director at the Institute for Policy Integrity, supported the SEC’s proposed rule in a statement Monday, saying the commission “no longer has the luxury of ignoring climate change.” The SEC, he said, must protect investors by demanding the same transparency on climate risk as other financial risks.

The SEC based the proposed rule on the 2017 disclosure recommendations of the Task Force on Climate-related Financial Disclosures created in 2015 under the direction of the Group of 20 finance ministers.

Commissioner Hester Peirce, who was appointed by President Donald Trump to fill a Republican seat, voted against the proposal, saying that it “will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable and reliable company disclosures.”

The existing filing rules, Peirce said, already require companies to disclose risks, such as those related to climate. In 2010, the commission issued guidance on how its rules at the time could require disclosure of climate issues for a business. Since then, investor interest has grown for more specific climate-related details in company filings, the SEC said in its proposal.

“It is appropriate for us to consider such investor demand in exercising our authority and responsibility to design an effective and efficient disclosure regime under the federal securities laws,” the commission said.

Peirce, however, said the proposal “exceeds the commission’s statutory limits.”

“Many calls for enhanced climate disclosure are motivated not by an interest in financial returns … but by deep concerns about the climate,” she said. The commission, she added, has a responsibility to limit disclosure requirements so they do not “bury the shareholders in an avalanche of trivial information.”

Compliance with the new rules would follow a phased approach, based on filing class. Assuming an effective date in December, filers would have to be in full compliance with everything but value-chain emissions disclosures for fiscal year 2025. Full compliance with value-chain emissions data reporting would begin in fiscal year 2026.

Sen. Edward Markey (D-Mass.) said the proposed rule is an “important step,” but he called for more aggressive action from the commission.

“I urge the SEC to expand the proposal to quickly require [value-chain] emission data, and to incorporate environmental justice considerations — such as assessment of the specific risks to [Black and Brown] communities — into the reporting requirements,” he said in a statement Monday.