Legitimacy and Transparency: Building Trust Through The SEC's Climate Disclosure Rule

This paper examines stakeholder reactions to the climate disclosure rule from the Security Exchange Commission (SEC) to understand how investors see government mandated disclosure as a legitimizing force. It analyzes a subsample of 230 original comments from various stakeholders and sorts them into themes. The themes and sentiments shared in the comments are viewed through the lens of legitimacy theory. It reveals that the informational requirements for legitimacy have shifted amongst some stakeholders to the point that voluntary climate disclosures are not sufficient. Government disclosures like the one from the SEC are seen by some as more transparent and trustworthy. There are many nuances to the commenters and the sentiments shared in the comments that make it challenging to make a singular argument on how disclosure shapes perceptions of legitimacy.