Client Alert
Disclosing Risks of Climate Change in SEC Filings
April 28, 2008
Sanjay M. Ranchod, Matthew J. Sanders and Tom Mounteer
For several years public interest groups have been pressing for greater disclosure of the financial impacts of climate change, and the impact on business operations of regulations to limit greenhouse gas emissions, in the reports of public companies filed with the Securities and Exchange Commission (SEC). Recent developments related to climate change now make it prudent for companies in certain sectors to re-evaluate whether and how to disclose climate risks in their SEC filings.
The challenge for businesses considering climate risk disclosures is that there are no specific rules or SEC guidance as to the length, scope, or substance of such disclosures. As a result, not since companies struggled with disclosure of their Superfund contingent liabilities in the early 1990s has there been so much interest in securities disclosure of environmental issues.