“The U.S. Securities and Exchange Commission (SEC) has not adequately addressed the climate disclosure deficiencies of publicly traded corporations, despite four-year-old formal guidance requiring companies to disclose material climate change risks, according to a report published by Ceres today. The report, Cool Response: The SEC and Climate Change Reporting, is based on a survey of more than 40,000 SEC comment letters sent to companies in the last four years and an analysis of the state of S&P 500 company reporting on climate disclosure through the end of 2013. It found that the majority of financial reporting on climate change is too brief and largely superficial, and that most companies are failing to meet SEC requirements. “Investors want greater transparency on the business risks of climate change as a means to protect and increase shareholder value,” said Ceres President Mindy Lubber. “Yet the SEC is not adequately enforcing its own requirements.” The SEC requires material climate change disclosure related to domestic and international regulatory risks; indirect effects of regulation or business trends; and physical risks, and evaluates companies’ filings to ensure compliance. Where a filing is not in compliance, the SEC discusses the issue in a comment letter sent to the company. Despite the low quality of corporate reporting on climate risk, however, the SEC sent climate-related comment letters to just three companies in 2012 and did not send any such letters in 2013. Following the issuance of the guidelines in 2010-2011, however, 49 comment letters were sent by the SEC.”
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