Trillium News

SEC Issues Ground-Breaking Guidance on Climate Change Risk Disclosure

[We’re pleased to excerpt this press release from Ceres, the Investor Network on Climate Risk and the Environmental Defense Fund. Trillium Asset Management Corporation participated heavily in the lobbying efforts that lead to this breakthrough.]

Peyton Fleming, Ceres, 617-733-6660 or
Steve Tripoli, Ceres, 617-247-0700 x155 or
Sharyn Stein, EDF, 202-572-3396 or
Download the Ceres/EDF Fact Sheet – SEC: Companies Must Disclose Climate Risks & Opportunities
Leading Investors Hail Today’s Landmark Decision
WASHINGTON, D.C. (January 27, 2010) – The U.S. Securities and Exchange Commission today issued new interpretive guidance that clarifies what publicly-traded companies need to disclose to investors in terms of climate-related ‘material’ effects on business operations, whether from new emissions management policies, the physical impacts of changing weather or business opportunities associated with the growing clean energy economy.
The guidance, the first economy-wide climate risk disclosure requirement in the world, was approved in a formal vote at today’s SEC Commissioners meeting in Washington. The lack of specific guidance until now has resulted in weak and inconsistent climate-related disclosure by public companies.
Today’s decision comes after formal requests by leading investors for the SEC to require full corporate disclosure of wide-ranging climate-related business impacts – and strategies for addressing those impacts – in their financial filings. More than a dozen investors managing over $1 trillion in assets, plus Ceres and the Environmental Defense Fund, requested formal guidance in a petition filed with the Commission in 2007, and supported by supplemental petitions filed in 2008 and 2009.
Investors hailed today’s new guidance and said it goes a long way to meeting disclosure needs outlined in their petition.
“We’re glad the SEC is stepping up to the plate to protect investors,” said Anne Stausboll, chief executive officer of the California Public Employees Retirement System (CalPERS), the nation’s largest public pension fund with more than $205 billion in assets under management. “Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not.”
“Today’s vote is a clarion call about the vast risks and opportunities climate change poses for US companies and the urgency for integrating them into investment decision making,” said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, a network of 80 institutional investors with $8 trillion in collective assets. “The business risks of climate change cannot be ignored. With this guidance investors can make more sound decisions based on better information – and businesses will have a level-playing field with clear standards and expectations for disclosure.”
“Companies across America are poised to prosper and create new jobs in the clean energy economy,” added Environmental Defense Fund President Fred Krupp. “Investors have a right to know which companies are planning to be part of the clean energy future and which are lagging behind.”
Today’s decision is the latest in a series of major policy actions over the past year requiring more robust climate risk disclosure across various industry sectors. Those actions include:

  • The Environmental Protection Agency’s new mandatory greenhouse gas (GHG) reporting rule, requiring some 10,000 facilities that are large sources of GHGs to report those emissions to EPA, beginning data collection on January 1, 2010.
  • The National Association of Insurance Commissioners’ (NAIC), the organization of insurance regulators for the 50 states, unanimously approved a mandatory requirement for insurers with annual premiums of $500 million or more to disclose climate risks to regulators, shareholders and the public beginning in May 2010.
  • A growing spate of climate disclosure related litigation, as well as subpoenas by New York’s Attorney General to five of the nation’s largest power companies regarding their climate disclosure in SEC filings. Three of those cases have been settled, including a major settlement in November, after the companies agreed to boost their disclosure.
  • A record number of shareholder resolutions seeking information on companies’ contribution and responses to climate change.

The Congress has also advanced major comprehensive climate protection legislation, including first-ever House passage of strong climate and energy legislation in June that caps greenhouse gas emissions; similar legislation is under consideration in the Senate.
Under SEC Chairman Mary Schapiro’s leadership, the SEC has also been active on disclosure issues. In October, the commission decided to allow shareholder resolutions that seek information from companies on the financial risks they face from social and environmental issues, including climate change. The decision reversed a rule that prevented investors from directly asking companies about the impacts of climate change and other pressing concerns on their bottom line.
The SEC is also evaluating a formal request from investors last June that companies be required to disclose material ESG (environmental, social and governance) risks. Schapiro has asked the new SEC Investor Advisory Committee to consider the request and make recommendations to the Commission.
To Maryland State Treasurer Nancy Kopp, who attended today’s meeting, the importance of the SEC’s decision is simple.
“State Treasurers invest vital taxpayer funds. We oversee public retirement and pension systems, college savings plans and more,” she said. “As investors safeguarding the economic welfare of so many state citizens, we have to be informed about the risks of companies we invest in. Easy and understandable access to accurate, comparable information regarding these very real risks – and climate change is certainly one of them – is essential to protect the investments our states depend on.”
Last June, Ceres, EDF and The Corporate Library issued a report showing 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 information to investors. The study was based on an analysis of 10-K and 20-F filings by 100 global companies in 2008.
About Ceres
Ceres is a leading coalition of investors, environmental groups and other public interest groups working with companies to address sustainability challenges such as climate change. Ceres also directs the Investor Network on Climate Risk, a network of 80 institutional investors with collective assets totaling $8 trillion. For more information, visit
About EDF
Environmental Defense Fund, a leading national nonprofit organization, represents more than 500,000 members. Since 1967, Environmental Defense Fund has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems. For more information, visit