Corporate Governance

A New Frontier ? Disclosing the Financial Risks of Climate Change

By Carol Straw

On August 27, 2008, New York State Attorney General announced an agreement with Xcel Energy for the utility firm to provide more disclosure to investors on the financial risks of climate change. According to Cuomo, ?This landmark agreement sets a new industry-wide precedent that will force companies to disclose the true financial risks that climate change poses to their investors.?

Mindy S. Lubber, president of the Ceres Investor Coalition, has hailed this grounding agreement that could send ripples throughout the financial community. ?It serves notice that all companies face financial exposure from climate change and will be expected to better inform investors of their strategies for dealing with it.?

According to Cuomo, Xcel agreed to provide detailed disclosure annually on present and probable future climate-change regulation and legislation; climate-change related litigation; and the physical impacts of climate change. To date, ten states have petitioned the SEC to clarify what companies should be disclosing about climate change risks. The commission has not publicly acted upon that request. It?s probably looking for some prodding from Congress.

Full post as published by PomTalk on September 09, 2008 (boomark / email).