State Treasurer Beth Pearce has asked the Securities and Exchange Commission to bolster reporting requirements for publicly traded companies to include disclosing risks to the climate.
Pearce made the request July 20 in a letter asking the SEC to conduct further study on risks that climate change poses to business and to build on current disclosure practices.
Pearce sought the changes through a letter to SEC Chairwoman Mary Jo White and SEC corporation finance division Director Keith Higgins, joining more than 100 institutional investors who are also seeking further guidance from the commission on disclosure requirements.
Vermont in 2007 petitioned the SEC, with a group of investors that together held $1.2 trillion in managed assets, to require companies to release in their corporate disclosures additional information relating to climate risks, Pearce states in her letter. In response to that petition, in 2010 the SEC updated its disclosure guidelines.
Today, “those issues, when material, must be disclosed in SEC filings,” Pearce wrote. “The state of Vermont commends the SEC for this significant step forward.”
This led to “a modest increase in the number of companies disclosing their exposure to climate change risk,” according to an analysis by a nonprofit called Ceres, said a statement from the treasurer’s office.
Pearce asked that the SEC further its efforts by creating a publicly accessible database containing public comments and responses from companies to those comments, in order to supplement financial documents already existing on federal business-filing databases.
“We believe (this and other changes detailed in the letter) would be mutually beneficial to investors and companies alike,” Pearce wrote. “It allows the shareholders to be better informed, generating additional transparency in the markets, and allows companies to identify and plan for impacts stemming from climate change risks.”
