The U.S. Securities Exchange Commission (SEC) has approved an interpretative guidance to clarify what publicly-traded companies should disclose to investors in terms of the impact that material climate change-related developments could have on their business. The SEC’s interpretative guidance, to be posted shortly on the SEC’s webpage, highlights areas where climate change could trigger disclosure requirements, including: new and potential legislation and international agreements related to climate change; climate-change related legal, technological, political or scientific developments that could create new opportunities or risks for companies; and physical impacts of climate change.
The new guidance constitutes a major victory for a large coalition of investors (including the Investor Network on Climate Risk and Ceres) who have been involved for over five years in a shareholder campaign to improve corporate disclosure of climate-related risks and opportunities. It is also a victory for the Social Investment Forum and other investor groups that have been asking the SEC to request improved disclosure from companies on risks and opportunities associated with environmental, social and governance (ESG) issues.
For more information, see:
U.S. SEC Press Release, “SEC Issues Interpretive Guidance on Disclosure Related to Business or Legal Developments Regarding Climate Change” (27 January 2010)
Ceres, Investor Network on Climate Risk (INCR) and Environmental Defence Fund (EDF), “SEC Issues Ground-Breaking Guidance Requiring Corporate Disclosure of Material Climate Change Risks and Opportunities” (27 January 2010)
Social Investment Forum (SIF), “SEC Climate Action “Important First Step” Toward Broader Sustainability Reporting For Investors” (27 January 2010)