Securities and Climate Finance
One critical question underpinning our response to climate change is how to mobilize the billions of dollars that will be needed to support mitigation and adaptation projects. Businesses and investors will also need to prepare for the effects of climate change on their assets and operations, and disclose climate-related risks to their shareholders. The Sabin Center explores how legal tools can be used to mobilize funds and ensure that companies prepare for climate risks.
Our projects and publications in this field are divided into two categories:
Securities and Climate Disclosures
Legal Tools for Climate Adaptation Advocacy: Securities Law, Nina Hart (May 2015)
This paper, written as part of our Adaptation Handbook, explains how citizens and governments can use securities laws to encourage companies to consider climate change impacts and implement measures to adapt to climate change. See also: adaptation law.
Climate Change Securities Disclosures in Australia, Amanda Liu (March 2014)
This working paper reviews the disclosure laws for Australian-listed entities under Australian securities filings regulations and provides an analysis of what is being reported in practice for the 2013 reporting year in relation to the risks of climate change. The review finds a lack of comprehensive risk identification and discussion which links climate change risks to business strategy and financial performance. Many of the company annual reports which were considered contained only limited basic information on climate change risks, if any at all, rather than any substantive disclosure of the risks associated with climate change impacts and their materiality on operations, business strategy or financial performance.
Moving at a Glacial Pace: What Can State Attorneys General Do about SEC Inattention to Nondisclosure of Financially Material Risks arising from Climate Change?, Nina Hart (Feb. 2014)
This working paper reviews SEC actions to date on the issue of climate change disclosure as well as other studies on disclosure rates to assess whether further guidance is warranted. Based on this review, the paper concludes that, both before and after the 2010 interpretive release, disclosure rates and quality amongst companies have been inconsistent. Additionally, although the SEC indicated in its 2010 interpretive release that it would take further actions to monitor disclosure practices and assess whether further guidance is necessary, the paper argues that the agency has largely failed to do so.
SEC Interpretive Release on Climate Change and Securities Disclosure (Archived Project, 2010)
The Securities and Exchange Commission published an interpretive release, effective Feb. 8, 2010, to guide U.S. public companies on the SEC’s existing disclosure requirements related to climate change. At that time, the Sabin Center compiled a website summarizing the release and compiling additional resources on the subject. Check back for updates later in 2016.
All publications on securities and climate disclosures are available here.
Blog entries on this topic are available here.
Climate Finance
Human Rights and Climate Finance
It is now well-documented that some of the projects supported by climate finance mechanisms such as the Clean Development Mechanism have resulted in egregious human rights violations. In our report on Climate Change and Human Rights (UNEP, 2015) we discuss this problem and the extent to which existing climate finance mechanisms incorporate safeguards to prevent human rights abuses. More recently, we submitted a letter to the UNFCCC secretariat requesting that human rights safeguards be incorporated into the Sustainable Development Mechanism created under Article 6 of the Paris Agreement.
All publications on climate finance are available here.
Blog entries on this topic are available here.