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Investors, Environmental Groups Push the SEC to Require Full Corporate Climate Risk Disclosure

June 12, 2008 – A broad coalition of investors and major environmental groups today repeated their call to the U.S. Securities and Exchange Commission (SEC) to address the obligations of publicly-traded companies to assess and fully disclose the material economic opportunities and risks from climate change. The 20 signatories to the letter include leading U.S. and European institutional investors such as CalPERS, CalSTRS, F&C Asset Management and the Maryland, New York, New York City, New Jersey, North Carolina and Oregon public pension funds.
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Washington DC Jun 12, 2008

A broad coalition of investors and major environmental groups today repeated their call to the U.S. Securities and Exchange Commission (SEC) to address the obligations of publicly-traded companies to assess and fully disclose the material economic opportunities and risks from climate change. The 20 signatories to the letter include leading U.S. and European institutional investors such as CalPERS, CalSTRS, F&C Asset Management and the Maryland, New York, New York City, New Jersey, North Carolina and Oregon public pension funds. See full list below.

In a supplement to their landmark petition last fall requesting formal guidance from the SEC on climate–related risks and economic opportunities companies should be disclosing, the groups filed new evidence today indicating the need for an immediate SEC response to the petition. Today’s filing cites a growing body of state, federal and international laws and regulations to limit greenhouse gas emissions that provide extensive economic opportunities for U.S. companies developing climate-friendly solutions and pose material risks to U.S. companies that decline to innovate.

The emerging carbon limits support the petition’s central contention that climate-related opportunities and risks are material to shareholder investment decisions and must be disclosed under existing law.  Consistent, regulated disclosure practices are critical for investors to make informed decisions.   Issuing clarifying guidance on climate-related disclosure is fundamental to the SEC’s core mission: “to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation.”

Since the petition was filed in September 2007, the SEC has received numerous supportive comments from more than 50 additional investors representing over $5.5 trillion.   Key Senate Banking Committee leaders, Senator Christopher Dodd and Senator Jack Reed, also supported the petition in a letter sent to the SEC last December.  The public comments are available at SEC Docket No. 04-547 at: http://www.sec.gov/comments/4-547/4-547.shtml.

“The SEC needs to do more to protect investors from the risks companies face from climate change, whether from physical impacts or new regulations that that will make CO2 emissions more costly,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, a network of 65 institutional investors with $5 trillion in assets.

“We urge the SEC to issue guidance on climate risk disclosure,” said Anne Stausboll, acting chief investment officer of the California Public Employees’ Retirement System (CalPERS), the nation’s largest pubic pension fund.  “CalPERS is supporting other efforts to improve climate risk disclosure, including state legislation in California and a National Association of Insurance Commissioners proposal to improve climate-related disclosure.  But SEC guidance for all publicly-traded companies is needed to protect investors.”

"Companies across America are working to solve climate change and protect our families from rising energy prices. Investors have a right to know which ones are planning for a clean energy future and which ones are lagging behind," said Fred Krupp, president of Environmental Defense Fund.

According to the original petition filed last year, climate change affects corporate performance in ways ranging from physical damage to facilities and increased costs of regulatory compliance, to opportunities in global markets for climate-friendly products and technologies that emit little or no global warming pollution.  The petition states that those risks fall squarely into the category of material information that companies must disclose under existing law to give shareholders a full and fair picture of corporate performance and operations.

The petition asks SEC to clarify that, under existing law, companies should disclose material information related to climate change. Depending on the circumstances, this obligation may require disclosure of the following information:

  • Physical risks associated with climate change that are material to the company's operations or financial condition;
  • Financial risks and economic opportunities associated with present or probable greenhouse gas regulation;
  • Legal proceedings relating to climate change.


Despite increasing demands from investors for more disclosure on climate risks, including a record 55 climate-related shareholder resolutions filed this year, corporate disclosure remains uneven and inconsistent. For example, Progressive Insurance, a major home and auto insurance company, failed to include any mention of climate change in its most recent annual filing, despite its admittance that “[m]ost of our past catastrophe-related claims have resulted from severe storms.”1 Exxon Mobil, the world’s largest private petroleum and petrochemical enterprise, made only one cursory reference to climate change in the 125 pages of its latest annual filing.2

The 20 signatories are:
California Public Employees' Retirement System
John Chiang, California State Controller
Jack Ehnes, California State Teachers’ Retirement System
Bill Lockyer, California State Treasurer
Mindy Lubber, President, Ceres
Fred Krupp, President, Environmental Defense Fund
Karina Litvack, Director, Head of Governance & Sustainable Investment, F&C Management
Alex Sink, Chief Financial Officer, State of Florida
Michelle Chan, Friends of the Earth
Nancy K. Kopp, Maryland State Treasurer
Lance E. Lindblom, President, CEO & Trustee, The Nathan Cummings Foundation
Orin Kramer, Chair, New Jersey State Investment Council
William C. Thompson, Jr., New York City Comptroller
Andrew M. Cuomo, Attorney General, State of New York
Thomas P. DiNapoli, New York State Comptroller/New York State Common Retirement Fund
Richard Moore, Treasurer, State of North Carolina
Randall Edwards, Treasurer, State of Oregon
Julie Gorte, Senior Vice President for Sustainable Investing, Pax World Management Corporation
Frank T. Caprio, General Treasurer, State of Rhode Island
Jeb Spaulding, Treasurer, State of Vermont

About Ceres

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 65 institutional investors with collective assets totaling $5 trillion focused on the business impacts from climate change. For more information, visit www.ceres.org or www.incr.com

About Environmental Defense Fund

Environmental Defense Fund, a leading national nonprofit organization, represents more than 500,000 members. Since 1967, Environmental Defense Fund has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems. www.edf.org


1Progressive Corp., Annual Report (Form 10-K), at 16 (Feb. 27, 2008), available here.
2Exxon Mobil Corp., Annual Report (Form 10-K), at 3 (Feb. 28, 2008), available here.

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