Coalition Calls for Corporate Climate Risk Disclosure
A coalition of investors, state officials with regulatory and fiscal management responsibilities, and environmental groups recently filed a petition asking the Securities and Exchange Commission (SEC) to require publicly-traded companies to assess and fully disclose their financial risks from climate change.
A coalition of investors, state officials with regulatory and fiscal management responsibilities, and environmental groups recently filed a petition asking the Securities and Exchange Commission (SEC) to require publicly-traded companies to assess and fully disclose their financial risks from climate change.
The 22 petitioners include leading institutional investors in the U.S. and Europe managing more than $1.5 trillion in assets.
The petition cites scientific evidence, regulatory developments and business recognition that the risks and opportunities many corporations face in connection with climate change are material to shareholder investment decisions and must be disclosed under existing law.
Climate change can affect corporate performance in ways ranging from physical damage to facilities and increased costs of regulatory compliance, to opportunities in global markets for climate-friendly products or services that emit little or no global warming pollution, says Environmental Defense. Those risks fall squarely into the category of material information that companies must disclose under existing law to give shareholders a full and fair picture of corporate performance and operations, the petition says.
The petition asks SEC to clarify that, under existing law, companies must disclose material information related to climate change. Depending on the circumstances, this obligation may require disclosure of the following information:
- Physical risks associated with climate change that are material to the company's operations or financial condition
- Financial risks and opportunities associated with present or probable greenhouse gas regulation
- Legal proceedings relating to climate change.
The signers include the California State Treasurer Bill Lockyer, Florida Chief Financial Officer Alex Sink, Maine State Treasurer David G. Lemoine, New York State Comptroller Thomas P. DiNapoli, North Carolina State Treasurer Richard Moore and Oregon State Treasurer Randall Edwards, as well as New York State Attorney General Andrew M. Cuomo.
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