Ceres Applauds EPA Greenhouse Gas Reporting Rule; Renews Call on SEC to Require Mandatory Climate Risk Disclosure in Securities Filings
Lauding the U.S. Environmental Protection Agency’s proposed greenhouse gas reporting rule, Ceres renewed its call on the Securities and Exchange Commission (SEC) to require publicly-traded companies to assess and fully disclose their financial risks and opportunities from climate change.
Mindy Lubber, President of Ceres and Director of the Investor Network on Climate Risk, a group of 77 institutional investors managing approximately $7 trillion in assets, said, “This rule is an important step forward in helping companies and investors reduce their financial risks from climate change. While the rule is focused on emissions from individual facilities, investors are also seeking company-wide information on climate risks and opportunities. The Securities and Exchange Commission (SEC) should coordinate with the EPA to make sure that information is quantified and disclosed in SEC filings.”
Investors including CalPERS, CalSTRS, the California Controller’s office and the Connecticut Treasurer’s office have previously called upon SEC to ensure that companies adequately disclose not only GHG emissions data, but also:
- Strategic analyses of climate risks and emissions management plans
- Assessments of physical risks related to climate change
- Analyses of regulatory risks related to climate change
Details are included in the . A larger group of 22 investors and other groups petitioned the SEC in September 2007, and again in June 2008, calling for interpretive guidance on climate risk disclosure.
Announced today, EPA’s proposed rule requires mandatory greenhouse gas (GHG) reporting from approximately 13,000 facilities, accounting for 85 to 90 percent of U.S. emissions. The rule covers key sectors with high emissions, including autos, oil and gas, coal and electric power.
Institutional investors have engaged with companies in those sectors for years, asking them to assess and disclose the risks and opportunities they face from coming climate change regulations and the physical risks of climate change. This year investors filed a record 62 global warming resolutions with U.S. companies, seeking greater disclosure on their financial exposure and response strategies to climate-related business trends. Investors have also created sector-specific climate disclosure frameworks for electric power companies and automotive companies.
"The SEC needs to protect investors from the risks companies face from climate change, whether from direct physical impacts or new regulations," said Ms. Lubber. "Shareholders deserve to know if their portfolio companies are well positioned to manage climate risks or whether they face potential exposure. Now is the time for the SEC to work with the EPA to ensure that financial risks and opportunities—as well as emissions—are disclosed to investors.”
Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a network of 77 institutional investors with collective assets of approximately $7 trillion focused on the business impacts from climate change. For more information, visit www.ceres.org orwww.incr.com.