YOU WERE WARNED.

• Author: Barkin, Dan

MANY BIG COMPANIES FORESAW A PANDEMIC THREAT. JUST AS MANY FEAR CLIMATE CHANCE'S IMPACT ARE WE READY?

The virus that took down the economy was a risk known to many businesses. It was right there in the 10-Ks, annual reports that companies file with the U.S. Securities and Exchange Commission. In the section where public companies disclose risks they face, the word "pandemic" is in the laundry list. Companies don't say there's a 90% chance or 1%, but they mention pandemics because there's enough chance. Last year, 21 of the 50 largest North Carolina public companies by market capitalization listed pandemics/ infectious diseases as risks to their businesses.

Concord-based Speedway Motorsports, which owns eight NASCAR tracks, said basically that a pandemic could shut it down in the 10-K signed by Chairman O. Bruton Smith in March 2019. Most people who bothered to read that probably thought, "Well, yeah, that asteroid would do the same thing if Bruce Willis doesn't nuke that bad boy in the 1998 thriller, Armageddon." Same odds.

One year later, a public health asteroid shut down NASCAR. I realize that 10-Ks don't get a ton of respect. They are often regarded by investors as unenlightening boilerplate. But the Coronavirus crisis reminds jaded investors that you should read them and their risk sections to see what keeps top executives up at night. They have to warn of risks because they get sued by angry shareholders when bad stuff happens. Companies point to the boilerplate and say, "No, we told you about pandemics."

These companies have been telling you about another risk, climate change, a threat that can't be stopped by a vaccine. Companies are worried enough to cite the risk, even though they haven't completely figured out what to do about it.

Why are companies taking it that seriously when President Trump has described climate change as a hoax invented by the Chinese to bring our companies down? After all, the people who draft 10-Ks are not typically greenies. They are accountants, corporate lawyers--you know, Republicans. Well, there are a couple of reasons.

One is that even if companies don't consider climate change as an imminent threat, they know most of the world's governments believe it is, and regulation is ramping up. Large companies operate in many countries. Trump is not the last word, even in America. California doesn't think it is a hoax and makes much of its own environmental policy. Ask carmakers. Or Charlotte-based Nucor...