So the S.E.C. has now said that companies have an obligation to tell investors of any risks, or potential benefits, that climate change poses to their business. To quote the New York Times:
The S.E.C., on a party-line 3-2 vote, issued “interpretive guidance” to help companies decide when and whether to disclose matters related to climate change. The commission said that companies could be helped or hurt by climate-related lawsuits, business opportunities or legislation and should promptly disclose such potential impacts. Banks or insurance companies that invest in coastal property that could be affected by storms or rising seas, for example, should disclose such risks, the agency said.
Via S.E.C. Says Companies Should Disclose Climate-Related Risks – NYTimes.com.
United States Securities and Exchange Commission official seal
Can anyone think of a company that won’t feel an impact one way or the other as the climate goes nuts? It’s easy to grasp that if you have a plant in a hurricane zone, then big trouble. But what if you don’t, but your main competitor does? Big boon. What if neither you nor your competitors have plants there, but your main customer does? Mucho big trouble. Closer to home here in Vermont, what if you run a tiny clothing store, and you’ve made a good living selling parkas and ski clothes. The snow melts too soon – or doesn’t come at all, and Chapter 11, here you come. And the ski areas, lodges and restaurants will follow closely after you. Our food and natural resources-based companies would be hard hit — maple syrup producers, Christmas tree farmers, and crop producers devastated by the greater spread of insects and diseases that survive in warmer, wetter conditions. (The Vermont Governor’s Climate Change Council 2007 Final Report details a list of impacts and recommendations.)
If you accept that the climate is changing, then it seems to me you must accept that every single SEC-regulated company would now have to list how different scenarios would affect its business. Perhaps the thought of all those disclosures frightened the SEC, because a standard disclaimer was added:
“ We are not opining on whether the world’s climate is changing; at what pace it might be changing; or due to what causes. Nothing that the commission does today should be construed as weighing in on those topics.”
Hmm, we are not saying that the climate is changing, but we are saying that you’d better disclose how you will be affected? The language of climate change is certainly rife with mixed messages.
