U.S. agency pushes corporations to disclose climate risks.

• Author: Block, Ben
• Position: EYE ON EARTH - Securities and Exchange Commission - Brief article

The U.S. Securities and Exchange Commission (SEC) has issued new guidance on what climate-related information publicly traded companies should disclose. The guidance, while not a legal requirement, may result in corporations more consistently disclosing greenhouse gas emission inventories and climate risk analyses.

In January, the SEC voted 3-2 to clarify that environmental compliance requirements, environmental risks, and potential future regulations, as well as how these developments may affect business operations and profitability, should be included in annual filings to the agency. Such filings form the basis of many investment decisions.

"A company must evaluate the impact [that climate change] would have on the company's liquidity, capital resources, or results of operations, and disclose to shareholders when that potential impact will be material," said SEC Chairwoman Mary Schapiro. "Similarly, a company must disclose the significant risks that it faces, whether ... due to increased competition or severe weather."

Research indicates that companies...