Securities and Climate Disclosures
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.
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.
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.
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.