Environmental Engineering Reference
In-Depth Information
been revised/upgraded constantly, this process
will require much more experience and deeper
understanding of the processes in order to succeed.
panies have always been required to include
information in their annual reports about risks
that they face that would influence their stabil-
ity and revenues, including environmental risks.
However, this ruling highlights the fact that the
SEC now acknowledges greenhouse gas and
climate change management as a relevant part of
doing business in today's global community. Anne
Stausboll, chief executive of the California Pub-
lic Employees Retirement System, summarizes
this by telling the NY Times, “investors have a
fundamental right to know which companies are
well positioned for the future and which are not”
(Ceres, 2010).
The SEC has provided specific suggestions
on the types of climate-related issues to disclose.
These include investments in regions where
rising sea levels are imminent, climate-related
lawsuits, business opportunities such as increasing
renewable electricity production, or legislation
related to any climate-related matters. The ruling
does not specifically require disclosure of GHG
emissions. However, companies are required to
report how climate laws could potentially change
their performance. Now that this ruling has been
issued, it would be useful to compare how com-
panies previously disclosed risk to how they will
disclose risk in their 2010 annual reports. Moving
forward, it would be interesting to investigate the
way that analyst reports interpret the disclosure
of such risks, and how investors make decisions
in relations to these disclosures (Broder, 2010).
FUTURE RESEARCH DIRECTIONS
Voluntary carbon reduction programs are diverse
and often complex. Some of the current programs
such as CDP have now existed long enough that
examining the numbers companies are reporting
uncovers useful information about whether or
not they work. In addition, there are regulations
emerging that will lead to significant changes in
emissions reduction platforms moving forward.
It would be informative to follow these programs
to understand how the existence of programs
such as C4C influences corporate ability to meet
regulated obligations under future climate regimes.
As companies incorporate the new regulations, it
will be interesting to examine how companies that
have participated in voluntary programs comply
with regulation, and compare the results to those
of companies that have not participated in such
programs.
SEC Ruling
In January 2010 the U.S. Securities and Exchange
Commission (SEC) ruled that all public companies
would be required to disclose in their annual reports
how climate change and climate-related impacts
influence their business. This decision sends the
message that SEC believes climate-related issues
could result in material impacts on a company's
success. The SEC feels that investors and analysts
should be made aware of how climate change
is impacting a business so they can include this
information in the risk profile of companies they
are reviewing.
The mandate will require that corporations
report on the physical effects of climate change
AND how climate laws could potentially change
performance. As per the rules of the SEC, com-
EPA Mandatory Reporting of
Greenhouse Gases Rule
As of January 1, 2010 the 10,000 largest GHG
emitters in the US are required to report the
quantities of their emissions to the United States
Environmental Protection Agency (EPA). This
reporting should account for about 85% of U.S.
GHG emissions. All fossil fuel suppliers, vehicle
and engine manufacturers, and facilities that emit
