SEC Prods Companies On Climate Change Disclosure
Author: Rachelle Younglai
WASHINGTON - U.S. securities regulators on Wednesday nudged companies toward disclosing risks associated with climate change in their annual reports.
For years, big investors have urged the Securities and Exchange Commission to issue guidance telling firms to disclose climate change risks because it could have an impact on their financial results.
In a 3-2 vote, a divided SEC heeded investors calls and suggested that companies have a responsibility to discuss the effects of the environment and pending rules on their business.
"Climate change and related governmental action can create risks and opportunities for companies," said SEC Commissioner Luis Aguilar.
Under SEC rules, companies are required to disclose material information or information that an investor should possess in order to decide whether to buy a company's stock.
Many companies already disclose environmental risks, but investors, such as the largest public pension fund, Calpers, contend that the information is not consistently disclosed.
(Editing by Tim Dobbyn)