Yesterday, the SEC released a sample letter to companies concerning climate change disclosures.  Relying upon the guidance the SEC issued over ten years ago--the 2010 Climate Change Guidance--the SEC noted that certain disclosures concerning climate change impacts may already be required. 

Perhaps most significantly, the SEC identified certain categories of information that the SEC would likely consider relevant when evaluating the sufficiency of corporate climate change disclosures.  These include:

  • "Material effects of transition risks related to climate change . . . such as policy and regulatory changes that could impose operational and compliance burdens, market trends that may alter business opportunities, credit risks, or technological changes"
  • "Material litigation risks related to climate change"
  • "Material pending or existing climate-change related legislation, regulations, and international accords and [] any material effect [of these] on your business, financial condition, and results of operations"
  • "Material past and/or future capital expenditures for climate-related products"
  • "Indirect consequences of climate-related regulation or business trends"
  • "Physical effects of climate change on your operations and results"
  • "Material compliance costs related to climate change"

Notably, many of these categories of information  relate to existing or pending regulation of environmental issues concerning climate change, whether national or international. 

One key consequence of this guidance is that companies may deem it advantageous to begin making climate change disclosures--based both upon the SEC's 2010 guidance and these newly identified categories of information--in advance of any new regulations that the SEC is planning to soon promulgate.  In effect, this information from the SEC suggests that certain climate change disclosures are already mandatory, even in the absence of new regulations.