Yesterday, the U.S. Securities and Exchange Commission issued ground-breaking guidance that clarifies what publicly-traded companies need to disclose to investors in terms of climate-related material effects on business operations. These ‘effects’ include new emissions management policies, the physical impacts of changing weather, and/or business opportunities associated with the growing clean energy economy.
This new guidance, the first economy-wide climate risk disclosure requirement in the world, comes after more than a dozen investors managing over $1 trillion in assets –plus Ceres and the Environmental Defense Fund –requested formal guidance in a petition originally filed with the Commission in 2007, and then supported by supplemental petitions filed in 2008 and 2009.
“Today’s vote is a clarion call about the vast risks and opportunities climate change poses for US companies and the urgency for integrating them into investment decision making,” says Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, a network of 80 institutional investors with $8 trillion in collective assets. “The business risks of climate change cannot be ignored. With this guidance investors can make more sound decisions based on better information – and businesses will have a level-playing field with clear standards and expectations for disclosure.”
The SEC decision is the latest in a series of major policy actions over the past year requiring more robust climate risk disclosure across various industry sectors. Those actions include: (more…)