The Green New Deal has been the focal point of the climate debate among the Democratic presidential candidates. Less publicized is the Climate Risk Disclosure Act, a proposal from Senator and presidential contender Elizabeth Warren, that seeks to frame climate change as a threat to the public markets.
The idea: force companies to publicly disclose how their valuation would fare should climate change continue versus how they would do should temperature rise be capped at 1.5 degrees Celsius higher than pre-industrial levels, the benchmark outlined in the Paris agreement.
"The Climate Risk Disclosure Act empowers investors to make smart decisions about where to invest their money by requiring that public companies be straight about how climate change and related policies will affect their bottom lines," said Sen. Warren in an exclusive statement sent to Cheddar. "Shareholders weighing this new information will compel big companies to speed up the transition to a clean energy economy, reducing the odds of an environmental and financial disaster without spending a dime of taxpayer money."
First proposed in 2018, and reintroduced with changes earlier this summer, Warren's bill would use the Securities and Exchange Commission to force publicly-traded companies to confront their own position within the climate crisis — and share that information with investors. The law, the Senator's office explains, would also have companies reveal their direct and indirect greenhouse gas emissions, share the total fossil fuel assets they own or manage, and outline their climate change risk management strategies.
It's certainly not the only climate proposal from the Massachusetts senator, but the Climate Risk Disclosure Act does appear fundamentally Warren-esque in its hope to use regulatory agencies — in this case, the SEC — to push the free market toward a less environmentally-destructive future.
Notably, the legislation was co-sponsored by several other presidential hopefuls, including Sen. Kamala Harris, Sen. Cory Booker, and Sen. Amy Klobuchar. It has also won the endorsement of sustainability advocacy organizations, including the Coalition for Environmentally Responsible Economies (Ceres) and the U.S. Forum for Sustainable and Responsible Investment (US SIF).
Rep. Sean Casten (D-Ill.) introduced the bill in the House, where it just passed the House Financial Services Committee.
"Public corporations must take responsibility for the large financial risks posed by the impacts of climate change, while embracing the economic opportunity of being global leaders in developing a clean energy economy," said Casten in a statement to Cheddar. "Our bill utilizes market mechanisms to incentivize climate action by ensuring that corporations disclose the risks posed by climate action to the benefit of their shareholders and the public."
This is not the first time an idea like this has come up. As early as 2007, state officials, investor advocates, and climate groups — including Ceres, Friends of the Earth, and Environmental Defense — had begun pushing the SEC to issue guidance as to how companies should disclose risks related to climate change.
"Companies' financial condition increasingly depends upon their ability to avoid climate risk and to capitalize on new business opportunities by responding to the changing physical and regulatory environment," they wrote in a letter to the agency. For instance, the organizations argued the physical impact of climate change could impact a company's ability to operate or expose it to new legal proceedings.
Three years later, the agency commissioners — in [a party-line vote] — finally issued guidance suggesting how companies might go about disclosing the risks related to the impact of climate change. The guidance noted that climate change could impact how a business described itself, its legal proceedings, managements' discussion and analysis of operations, and risk factors facing the company.
"It did not change any of its rules. It just said our current rules mandate addressing the risks of climate change," explains Alan Palmiter, a business law professor at Wake Forest University.
Palmiter has written that, at first, the SEC's guidance drew a good amount of attention. He found that a "flurry" of law firms sent letters to their clients notifying them of the new guidance, with many noting that the SEC could take further action on the subject.
However, Palmiter found that some law firms were unsure how to follow the guidance. Some also questioned the capacity of companies to determine how climate change might affect them, and some doubted the existence of climate change altogether, he found.
But despite some initial fanfare, the guidance didn't seem to have much impact on how many — or how much — companies disclosed about their climate risks. Palmiter notes that "during the first years after the SEC guidance, fewer than three-fifths of companies in the S&P 500 mentioned climate change in their 10-K annual reports" and that most of these were simply "a short one-paragraph risk factor."
In 2014, Ceres argued the SEC had not prioritized "the financial risks and opportunities of climate change as an important disclosure issue." The non-profit noted that the agency comment letters related to the adequacy of climate change-related disclosures had dwindled from 38 in 2010 to none in 2013. Many companies had said nothing about climate change in their annual SEC filings, the organization found, and disclosures were highly variable, often revealing little detailed information.
Two years later, the SEC requested comment on a wide range of issues, including climate change, but there doesn't appear to have been any subsequent action under the Trump administration. Last year, the SEC also received a request for a petition for broader rulemaking governing "environmental, social, and governmental" disclosures.
When asked about its guidance for companies in regard to climate change, the SEC directed Cheddar to the 2010 guidance. The agency did not respond to follow-up questions as to whether further guidance had been issued since then and why enforcement appears to have slowed.
The Government Accountability Office's February 2018 review of the guidance found that the SEC was limited because it "primarily relies on information that companies provide," couldn't subpoena more information, and the information it did have wasn't standardized across companies. It also reported that industry associations said "they consider the current climate-related disclosure requirements adequate and no additional climate-related disclosures are needed," but that "some investor groups and asset management firms have highlighted the need for companies to disclose more climate-related information." Echoing the GAO, Jim Hempstead, a managing director at Moody's told Politico this June, "Climate disclosures that are coming out right now are all over the map," and implying that disclosures "comparable across companies" would be more helpful.
Warren re-introduced the legislation this summer, saying it would "give investors, and the American public, the power to hold corporations accountable for their role in the climate crisis."
The failure of the 2010 guidance has been at the foundation to push this bill ahead, with the leaders of both Ceres and US SIF, citing the SEC's "lax" enforcement in their support for Warren's 2019 Climate Risk Disclosure Act.
Whether the bill will be passed or not, like so much of a growing slate of bills meant to combat the climate crisis, may rest on the ability of Democrats to win back the Senate and the White House in the upcoming election.
And while it's not likely to be signed into law yet, Bryan McGannon, director of government relations at US SIF, notes: "It builds a track record."
This story originally appeared in Cheddar. It is republished here as part of EcoWatch's partnership with Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.
- Investors Want Companies to Disclose Environmental Risk - EcoWatch ›
- New Fed Report Finds Climate Change Threatens U.S. Markets - EcoWatch ›
Rugs add a cozy aesthetic to the home, but they can also contribute to toxin exposure if you’re not careful when shopping around. How do you find the best sustainable rugs in a world where almost everything is mass produced with questionable chemicals involved?
There is a lot to consider in the search for a nontoxic rug you hope was ethically made. That’s especially true in a time where we are reevaluating our environmental impact every day. We rounded up four of the best sustainable rugs for any area of your home, from your living room to your outdoor space. Read on to learn more.
Best Sustainable Rugs: Our Recommendations
- Best Overall: Safavieh Handmade Flatweave Jute Area Rug
- Best Cotton Rug: Lorena Canals Washable Rug
- Best Runner: Chardin Home Runner Rug
- Best Outdoor Rug: Fab Habitat Recycled Plastic Outdoor Rug
Each product featured here has been independently selected by the writer. Learn more about our review methodology here. If you make a purchase using the links included, we may earn a commission.
Why Switch to a Sustainable, Nontoxic Rug?
Many people want to secure an area rug in the most affordable, fastest and easiest way. However, that often leaves your choices limited to rugs that are most likely not sustainably or ethically made.
Most ordinary new rugs and carpets contain harmful chemicals called volatile organic compounds, or VOCs. They can off-gas for up to five years, emitting VOCs in your home and causing short- and long-term health issues including headaches, dizziness, liver and kidney damage, and even cancer in animals and humans. An eco-friendly rug choice avoids these adverse health effects.
You may also wonder why you need a special cleaner filled with questionable chemicals for a rug. In some ways, you end up spending more money over time on a synthetic rug that ends up in the landfill.
By choosing home decor products made from sustainable materials, you can make a positive impact and promote a kinder and healthier planet.
Full Reviews of Our Top Picks
Best Overall: Safavieh Handmade Flatweave Jute Area Rug
Safavieh is a trusted name in natural rug making that has been around for over 100 years. Its handmade flatweave jute rug collection contains size and shape options ranging from 3-by-5-foot area rugs to 5-by-6-foot ovals to 9-by-12-foot runners. The rug is handwoven, and the beige color and traditional weave of sustainably-harvested sisal and seagrass make it a classic option for any space.
Customer Rating: 4.6 out of 5 stars with over 600 Amazon ratings
Standout Review: “These rugs are absolutely awesome… They're both easy on the eyes and the feet. We have a round one in the entryway and an oval one at the bottom of the stairs… They are easy to vacuum and sweep, combining pleasing aesthetics with functionality and durability.” — Alison via Amazon
Why Buy: Safavieh is known for its high-quality yet affordable products. The flatweave jute rug is beautifully handwoven and provides a classic, minimalist look to any area of the home.
Best Cotton Rug: Lorena Canals Washable Rug
Lorena Canals’ washable cotton rugs are made with a base of 97% recycled cotton and use only natural dyes in the coloring process. They’re handcrafted by artisans in India and can give a warm yet modern touch to your home. This particular rug measures just over 5.5 by 8 feet, but there are other size options available.
The company’s RugCycled program utilizes textile leftovers from the production of its cotton and wool rugs, helping Lorena Canals’ overall process become less wasteful. Plus, every purchase helps a child in North India attend school.
Customer Rating: 3.8 out of 5 stars with under 10 Amazon ratings
Standout Review: “Taking 1 star away because by no means it can be washed in a regular washer machine… Now do I like this rug? I LOVE IT! It is worth the trip to the laundromat.” — Ann via Amazon
Why Buy: If you’re looking for something you can throw in the wash after a spill or accident, this is one of the best sustainable rugs to consider.
Best Runner: Chardin Home Runner Rug
Chardin Home collects cotton rags from different factories and upcycles them into multicolor rugs. No two rugs are exactly the same, though the company makes every effort to best match them if you buy more than one of the same kind. The most popular size is this 2-by-7-foot, but the rug options span from 2-by-5 feet to up to 8-by-10 feet. The rugs are also reversible and long-lasting.
Customer Rating: 4.6 out of 5 stars with almost 1,500 Amazon ratings
Standout Review: “With this rug, suddenly everything goes together beautifully! … I have an 8-year-old, two dogs (5 pounds and 40 pounds), and a cat. I’ve had this rug for a bit, and it has held up so well.” — Lauren W. via Amazon
Why Buy: This affordable, colorful runner is reversible and withstands your pets while being healthy for them. It’s one of the best sustainable rugs for narrow spaces.
Best Outdoor Rug: Fab Habitat Recycled Plastic Outdoor Rug
Made from recycled plastic straws, this rug by Fab Habitat is perfect for outdoor spaces. Some people also use these indoors (I personally use an outdoor rug under my bed). The rug is fade-resistant and stain-deterrent. The material also means the rug will never be threatened by moisture.
This 5-by-8-foot rug comes in several eclectic and oceanically-colorful designs from jodhpur blue to monochromatic teal and a more practical blue. At an affordable price, it helps save both the planet and your purse.
Customer Rating: 4.6 out of 5 stars with over 1,100 Amazon ratings
Standout Review: “This rug lives up to its reputation. We just moved to Florida, and it rains almost daily since we got here. This rug doesn’t hold water, and it feels smooth under your feet.” — Katelyn via Amazon
Why Buy: The U.S. city-by-city ban on plastic straws started around 2018, but they still overtake landfills and take ages to decompose. A recycled plastic straw rug helps provide one solution to this while being stylish, stain-deterrent, fade-resistant and easy to clean. Just shake it out and hose it down.
How to Choose the Best Sustainable Rug
There are a few factors to consider when purchasing the best sustainable rug for your home:
- Natural fibers: What material is the rug made out of? When looking for nontoxic rugs, choose natural fibers like organic cotton, jute, wool and sisal. Agave sisalana is the botanical name for sisal, which is native to southern Mexico. Many fruit plants also make cozy natural textile materials in place of genetically modified cotton.
- Material harvesting and manufacturing: Was the material ethically harvested? Was the rug sustainably made? Is it an ethically made rug? Was the rug treated with any chemicals?
- Cost: A handmade rug understandably costs more than a mass-produced one. However, you should also shop around and stay within budget.
- Style: Many natural fiber and sustainable rugs are varied and unique in design. Have a look in mind when shopping for an organic rug to ensure you will be happy with the aesthetic.
Note that some natural fibers, like jute, can shed and may tend to unravel lightly in some areas over time. That’s the nature of the material.
Frequently Asked Questions: Best Nontoxic Rugs
How do you know if a rug is toxic?
A rug’s surface can consist of natural fibers. However, many don’t consider that the rug's backing and underlay padding could contain toxic materials. All parts of the rug should be produced with natural materials. Unfortunately, you may also find hidden toxins in the form of formaldehyde, stain deterrent treatments and flame retardants on the surface of the rug.
Are jute rugs environmentally friendly?
Yes, jute rugs can be very environmentally friendly. Jute is a sturdy natural fiber that many consider to be one of the most eco-conscious materials out there. Jute comes from a tropical plant and is both recyclable and biodegradable. Jute fibers are spun into durable threads to create such products as twine, mats and rugs.
Are handwoven rugs ethical and sustainable?
It is ethical to purchase from a craftsperson who used their skills and traditional practices to thoughtfully make a beautiful and sustainable rug. However, many products that are labeled “sustainable” can still be produced unethically and illegally via child labor and human rights violations. A good resource to check is Amnesty.org, which recently discovered human rights violations by larger U.S. companies in the production of “sustainable” palm oil.
Research each product and manufacturer across various platforms, always checking reviews and non-biased news sources. Where possible, purchase ethical rugs from craftspeople directly. Local maker collectives and arts organizations are great places to start.
How do you clean a natural fiber rug?
Drenching a natural fiber rug with wet shampoo or steam can cause damage and discoloration. Spot-clean natural fiber rugs with a mild detergent, or use club soda for acidic stains.
Routinely sweep or vacuum your rugs lightly, using a rug beater as appropriate. You can also buy a dry cleaning powder that is compatible with natural fiber rugs. Simply sprinkle this powder on the rug and vacuum it up. Take more heavily soiled rugs to a green dry cleaner if care instructions allow.
With fair labor practices and ethical standards in place, a rug made of natural fibers is a much more eco-friendly option than a rug made with toxic chemicals. Be wary of companies that greenwash their marketing with sustainability claims they fail to deliver on.
Where possible, consider handcrafted rugs when shopping for a rug for your home. It’s much easier to verify sustainability, and you support a talented individual and the local economy with your purchase.