On January 27, in a 3-2 vote, the US Securities & Exchange Commission
voted to provide public companies with interpretive guidance on existing
SEC disclosure requirements as they apply to business or legal
developments relating to the issue of climate change.
The SEC's press release on the decision notes that the interpretive
guidance does not create new legal requirements through rule adoption,
nor does it set forth new standards of materiality. Instead, the
guidance highlights the following areas as examples of climate-related
issues that may trigger disclosure requirements in a company's risk
factors, business description, legal proceedings, or management
discussion and analysis included in its filings with the SEC:
- Impact of Legislation and Regulation: Where the impact of existing
laws or regulations, or pending legislation in certain circumstances,
would be material to the company
- Impact of International Accords: Where the risks or effects of
international accords and treaties relating to climate change are
material to a company
- Indirect Consequences of Regulation or Business Trends: Where legal,
technological, political, and scientific developments regarding climate
change may create new opportunities or risks for companies and the
actual or potential indirect consequences a company may face due to
climate-change-related regulatory or business trends
- Physical Impacts of Climate Change: Where environmental matters have
actual or potential material impacts on a company's business
The text of the interpretive release containing the new disclosure
guidance has not yet been made public by the SEC.
(from a legal alert)