Published on:

SEC Issues Interpretive Guidance On Need to Disclose Impacts of Climate Change

The Securities and Exchange Commission issued interpretive guidance on the application of existing regulations to the need to disclose the impacts of climate change on business. In a press release issued on January 27th the SEC provided examples of instances in which climate change or regulations related to climate change may trigger disclosure requirements, noting the guidance highlighted:

” *Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.

*Impact of International Accords: A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.

*Indirect Consequences of Regulation or Business Trends: Legal, technological, political and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.

*Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business.”

-Steven Silverberg

Contact Information