Enlarge / It can be tough to run a business when your loading dock is under water. (credit: Getty Images)
On Monday, the US Securities and Exchange Commission (SEC) announced new rules about disclosing climate risks for companies listed on US-based stock exchanges. The rules are meant to give investors a clearer sense of how companies manage present and future challenges posed by climate change and by attempts to reduce greenhouse gas emissions. The rules will be published in the Federal Register for public comment shortly. A final version is expected later this year, and the lawsuits are likely to begin afterward.
In the announcement, SEC Chair Gary Gensler said the new rules adhere to the organization’s mission. “Our core bargain from the 1930s is that investors get to decide which risks to take,” he said, “as long as public companies provide full and fair disclosure and are truthful in those disclosures.” Typically, risk disclosure occurs in required formal filings that companies make with the SEC, like quarterly financial statements.
Some companies disclose their risks voluntarily, but the absence of standards allows them significant leeway over what to reveal. And many other companies choose not to disclose anything related to climate.
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