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The Business of Emitting
 September 18th, 2007 a coalition of environmentalists, institutional investors and state investment officers filed a petition with John W. White, Director of the SEC's Division of Corporate Finance. According to a press release from investment firm Stoel Rives, the petition asked that "SEC issue interpretive guidance clarifying the obligations of public companies under existing SEC rules to disclose material information concerning regulation of GHG emissions and potential effects od climate change on the company's financial condition and results of operations. The petition argues that increased federal, state and regional regulation is likely, and that the effects of GHG emission regulation and climate change are a material risk to the performance and operation of many businesses and important to investors." Only a few days before, The New York Times printed a small article on New York State Attorney General, Andrew Cuomo, who supoenaed 5 power companies, charging they failed to disclose enough information to investors about financial risks of coal-fired power plants. In effect he is arguing under current SEC rules, companies already had a duty to disclose "climate change risk". The petition has inspired a litany of media coverage regarding investments and emissions. A September 22nd article in The Wall Street Journal, The Climate for Investing, or Vice Versa asks "Could Global Warming Burn Your Portfolio?" They suggest investors review the SEC Filings and check a company's annual report. Read the "Management Discussion and Analysis" to see if climate change is listed there as a risk, which means the management thinks the threat is "material" and can also help investors gauge if the company is focused on the risk. An article in MarketWatch, titled Debates Heat Up argues "Disclosing risks associated with climate change shouldn't be any different than disclosing any other risks that might affect a business's performance." And to top it off, a September 22nd article in The New York Times, This Climate Is Surely Full of Hot Air asks us why we would possibly believe the petition has any chance of being adopted! The author reminds us that history is "full of instances where the sky was supposed to be falling-and then didn't...(Y2K, anyone?)", and then questions why we "assume that the big, bad corporations must be brought to heel even as the rest of us continue to buy our SUV's and ipods". Stay tuned for the SEC's response!! COMMENTS Post a Comment
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