By Mary Ellen Ternes
On February 2, 2010, the SEC issued interpretive guidance explaining how public companies must disclose impacts of climate change related issues to shareholders. The categories of disclosures discussed by the SEC include impacts to business from: (1) Legislation and regulation including direct and indirect changes to profit or loss dynamics from cap-and-trade; (2) International accords; (3) Indirect consequences of regulation or business trends, such as decreased demands for goods that produce significant greenhouse gas emissions, or increased demand for services related to carbon based energy sources, among others; (4) Physical impacts of climate change, including “severity of weather (for example, floods or hurricanes), sea levels, the arability of farmland, and water availability and quality,75 have the potential to affect a registrant’s operations and results.”
For more information,
see SEC Release No. 33-9106, Commission Guidance Regarding Disclosure Related to Climate Change, February 2, 2010.