Climate Change Goes Mainstream?
SEC gets serious about giving investors insight on climate risk for large companies
Rarely am I going to write about the Securities and Exchange Commission (I promise).
But, it’s worth mentioning this week because they recently announced a proposed ruling that every publicly-traded company in the U.S. will have to report climate risk and greenhouse gas emissions data using a standardized approach.
This is a bigger deal than it might seem.
This is all about transparency and investment money. Up until now, investors have been flying a bit blind as to whether or not climate change poses any risks to their investments in large companies. Now, they will have more information on short, medium, and long-term risk in the face of climate change. So, that’s good for investors (including for retirement portfolios and so on.)
But the real good news for the rest of us, is that this mandatory risk disclosure becomes an incentive for a company to ‘do better’ with how it manages climate - both its impact ON the climate, and the impact OF the climate on its business decisions, products, services, assets, governance etc.
Many large companies have already been assessing risk and impact, but this forces everyone to be transparent and use the same approach.
This is climate change action going seriously mainstream.
If you want to learn more:
The SEC press release and fact sheet and actual (500-page) proposed rule