Investors with $1.4 trillion in assets call on SEC to improve disclosure of climate change
15 June 2009 | Luca Del Buono |
Members of the Investor Network on Climate Risk (INCR) and other leading global investors sent a letter to the U.S. Securities and Exchange Commission (SEC) on Wednesday requesting that the Commission address corporate disclosure of climate change and other material environmental, social, and governance (ESG) risks in securities filings.
The letter's 41 signatories include some of the nation's largest public pension funds, state treasurers, controllers and comptrollers, asset managers, foundations and other institutional investors with approximately $1.4 trillion in assets under management (see list below).
The letter was sent to SEC Chairman Mary Schapiro, Commissioner Luis Aguilar, Commissioner Kathleen Casey, Commissioner Troy Paredes, and Commissioner Elisse Walter.
Among other requests, the letter asks the SEC to issue formal guidance on material climate-related risks that companies should disclose and enforce existing disclosure requirements for climate change and other risks.
"Recognizing that information is the foundation of efficient markets, we … strongly encourage the Commission, in setting its priorities for the year, to acknowledge the financial implications of climate change and other environmental, social and governance risks for investors and take steps to address them," states the letter, which is the investors' first appeal to the new SEC leadership on corporate risk disclosure.
The letter comes on the heels of two recently released reports that examine climate risk disclosure in corporate 10-K filings.
The reports showed that S&P 500 companies-including those with the most at stake in responding to the risks and opportunities from climate change-are providing scant climate-related disclosure to investors.
Florida CFO Alex Sink said: "Florida has the opportunity to become a national leader in developing innovative solutions to our nation's energy challenges, and we should be on the forefront of addressing the climate change risk.
That's why Floridians deserve to know the financial risks companies face from climate change, with standardized, comprehensive information and guidance from the SEC."
"Climate change and other environmental and social issues pose bottom line risks, and investors have a right to know which businesses are best positioned to compete in the emerging low-carbon global economy," said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk.
"We are optimistic that the new SEC understands the importance of corporate risk disclosure and will do what is necessary to protect investors' interests."
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