SEC: Don’t forget to disclose the impact of potential climate change legislation
The Securities and Exchange Commission issued an interpretive release on Wednesday in an attempt to offer guidance to public companies regarding the need to disclose the impact of environmental legislation and regulation on their businesses.
The SEC assured companies that it is not changing the traditional standard for disclosure which remains “materiality.” The Commission did stress that if there is any doubt as to whether something is material or not, the doubt should be resolved in favor of the investor and should be disclosed.
Despite Chairman Shapiro’s assurances that the SEC is not changing disclosure requirements, some experts believe that it is unprecedented for the SEC to require companies to speculate on what legislation will pass and what its consequences will be.
Commissioner Kathleen L. Casey, a Republican on the panel, quoted in the Wall Street Journal said, “I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise and beyond our fundamental mission of investor protection.”
Ms. Casey further noted that ” . . . it made little sense to issue such guidance ‘at a time when the state of the science, law and policy relating to climate change appear to be increasingly in flux.’ ”
Additional reading:
We have discussed this topic before at Greenlegals - see http://greenlegals.com/2009/06/the-legal-case/
See also - http://www.edf.org/pressrelease.cfm?contentID=10753
Video : http://www.sec.gov/news/press/2010/2010-15.htm
Copyright 2010 — K.J.Collins
