Securities and Exchange Commission (SEC) rules require companies
to disclose impacts or risks that are material to their business.
In September 2007 and again in November 2009, a coalition of
leading institutional investors petitioned the SEC to issue
guidance on existing SEC disclosure obligations as they relate to
climate change. Following this pressure, on January 27, 2010, the
SEC approved an interpretive release that addresses when
legislative or business developments relating to climate change
trigger disclosure obligations. Although the interpretative release
has not yet been issued, the SEC has indicated that disclosure
obligations may be triggered when a company evaluates, and
determines to be material to its business, (1) the impact of
existing (or in certain circumstances, proposed) legislation and
regulation relating to climate change; (2) the risks or effects of
international accords and treaties relating to climate change; (3)
the potential or actual indirect consequences of regulatory or
business trends associated with climate change; or (4) the effects
of actual or potential physical impacts of climate change.
Further detail is available in the SEC news release
(http://www.sec.gov/news/press/2010/2010-15.htm) .
In our December 2009 issue
(http://stikeman.com/cps/rde/xchg/se-en/hs.xsl/13389.htm) of the Emissions Trading and Climate Change Update we
reviewed comparable efforts of the Ontario Securities Commission to
establish guidance for climate change disclosure in Ontario. We
will continue to follow the progress of the SEC and the OSC in
establishing detailed guidance for climate change disclosure. Look
for further analysis and observation in future bulletins.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
