Companies will have to disclose how much polluting emissions they produce and how global warming affects their businesses under new rules proposed on Monday by the US Securities and Exchange Commission (SEC) as part of a government-wide push to address climate change.
Under proposals adopted in a 3-1 vote by the SEQpublic companies will have to report their climate risks, including the cost of moving away from fossil fuels, as well as risks related to the physical impact of storms, droughts, and higher temperatures from global warming.
They will need to outline their transition plans to deal with climate risk, how they intend to meet climate goals and the progress made, and the impact severe weather events have on their finances.
The number of investors seeking more information about risk related to climate change has increased dramatically in recent years. Many companies already volunteer climate risk information. The idea is that, with uniform information required, investors can compare companies within industries and sectors.
“Companies and investors alike would benefit from clear rules of the game” in the proposal, said the chairman of the SEC, Gary Genesler.
Required reporting would include greenhouse gas emissions produced directly or indirectly by businesses, such as from consumption of company products, vehicles used to transport products, employee business travel, and energy used to produce raw materials.
The SEC issued voluntary guidelines in 2010, but it is the first time mandatory reporting rules have been introduced.. The rules were open to a public comment period for approximately 60 days and may be modified before final adoption.
Source: Gestion
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