S.E.C Adds Climate Risk to Disclosure List

Guest post by Verna Hale

The Securities and Exchange Commission (S.E.C.) is proposing to add climate risks to the current list of disclosures public companies should report.

Properties along the coastline may be affected by hurricanes and banks or insurance companies that invest in coastal property could be affected by storms or rising seas and would therefore be a good example of a climate risk disclosure. Investors have a fundamental right to know which companies are well destined for the future and which are not and they should essentially get information on climate-related impacts, including regulatory and physical impacts.

Although S.E.C. Chairperson, Mary Schapiro, stated the S.E.C. was not taking any particular political side by adding climate risk to the disclosure list, investors and environmental groups did petition the agency to have this item added to what companies need to disclose and hence stay warned.

The Petition for Interpretive Guidance on Climate Risk Disclosure can be read here.