Two new studies from investor group
Ceres, the
Environmental Defense Fund and the
Center for Energy and Environmental Security assess the major impacts climate change could have on global companies, and calls on the U.S. Securities and Exchange Commission to set standards for climate-related risk reporting.
The two new studies, one an in-depth look filings from 100 global companies in 2008, and another a longitudinal look S&P 500 companies' reports over the past 13 years, detail how slowly some of the world's largest companies are in recognizing and forming a plan to mitigate the impacts of climate change on business operations.
In "Reclaiming Transparency in a Changing Climate," the groups reviewed more than 6,000 SEC filings from S&P 500 companies between 1995 and 2008. The report finds that just 5 percent of annual reports from these firms laid out a strategy for managing climate change-related risks, while 76 percent of companies didn't even mention climate change in their reports.
The report breaks down risk awareness and mitigation strategies by sector and finds them by and large falling short. The utilities industry scored highest, with over 96 percent of companies at least mentioning climate change, and over 35 percent identifying at least one risk and a strategy to address it. The IT and telecommunications sectors fared poorest, with no companies in either category identifying risks or solutions, and zero telecom firms mentioning climate change and just 6.5 percent of IT firms doing so.
The second report from the groups, "Climate Risk Disclosure in SEC Filings," analyzes more recent filings from some of these industries, and shows that, while the energy industries are disclosing climate change risks to a greater extent than other sectors, the detail and depth of those disclosures are far from sufficient to help investors make wise choices.
Meanwhile, the report finds, many companies in the insurance and transportation sectors offered no disclosure at all on their climate-related risks or opportunities.
As a result of these reports' findings, the groups are calling on the SEC to offer detailed guidance for the ways that companies should include climate-related disclosures in their securities filings.
"These findings are a clarion call for quick SEC action to require better climate risk disclosure from publicly-traded companies,” Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, said in a statement. "Climate change is a bottom line issue and investors have a right to know which companies are best positioned for the emerging clean energy global economy."
The reports are both available for download from GreenBiz.com: "
Reclaiming Transparency in a Changing Climate" and "
Climate Risk Disclosure in SEC Filings."
Office photo CC-licensed by Flickr user 96dpi.
