SEC tells companies to disclose climate risks

There's been a lot of talk about climate change and the impact various legislative proposals might have on companies. Now the Securities and Exchange Commission wants companies to tell investors about it too. The SEC commissioners on Wednesday voted 3-2 to approve new interpretive guidance that clarifies what publicly traded companies need to disclose to investors about climate-related 'material' effects on business operations, whether from pending legislation, the physical impacts of changing weather or business opportunities associated with substitutes for fossil fuels. It's an important step in raising investor awareness about climate change issues, and in focusing businesses on the potential costs, said environmentalists and other disclosure groups. But given the highly uncertain nature of climate change and the political winds buffetting proposed cap-and-trade legislation, some lawyers say it may be hard for companies to judge just what to say...read more

The companies should also disclose the risks of being governed by the SEC.