SEC Asks Companies To Divulge Pollution and Climate Risks (theverge.com) 45
The US Securities and Exchange Commission proposed new rules today that could require companies to update investors annually on how much planet-heating pollution they're pumping out and how that pollution could ultimately affect their earnings. From a report: A slew of companies from Apple to Amazon have pledged to become carbon neutral in coming decades. Consistent updates on how much pollution they generate help ensure that climate pledges aren't just greenwashing or making false promises. The proposed rules are also supposed to protect investors as companies cope with disasters linked to climate change, like more extreme weather. "We are concerned that the existing disclosures of climate-related risks do not provide investors with the detailed and reliable climate-related information they need to make informed investments and voting decisions," Renee Jones, director of the SEC's Division of Corporation Finance, said during an SEC open meeting today.
If the rules go into effect, public companies would need to share greenhouse gas emissions from their operations and electricity use. The SEC also sought to hold some companies responsible for indirect emissions that come from their supply chains and consumers using their products, a more contentious disclosure. Some companies have excluded these indirect emissions from climate pledges, arguing that this pollution is out of their control. The SEC said today that smaller companies won't have to disclose those indirect emissions, and larger companies only need to share the indirect emissions that are "material" or essential for investors' understanding of a company's financial situation -- a murky distinction.
If the rules go into effect, public companies would need to share greenhouse gas emissions from their operations and electricity use. The SEC also sought to hold some companies responsible for indirect emissions that come from their supply chains and consumers using their products, a more contentious disclosure. Some companies have excluded these indirect emissions from climate pledges, arguing that this pollution is out of their control. The SEC said today that smaller companies won't have to disclose those indirect emissions, and larger companies only need to share the indirect emissions that are "material" or essential for investors' understanding of a company's financial situation -- a murky distinction.
Who promoted the SEC? (Score:1)
Since when did the SEC start managing the environmental domain?
Jan 20, 2021 (Score:3)
That's when.
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This massive over reach, way outside their mandate just like OSHA vaccination bullshit. Hopefully the courts will swat this shit down hard.
That said it will be interesting if it does go into effect. I really want some companies like Microsoft that say they are going zero-carbon do when faced with legally binding statements to that effect
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I believe there is a case before SCOTUS right now regarding the EPA and their potential overreach that might be the first test of reigning in the unelected govt departments.
I'd like to see them bring them all down from "making law", especially the ATF, they have been playing VERY fast and loose on that lately, and with them, they can turn millions of law abiding Americ
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I believe there is a case before SCOTUS right now regarding the EPA and their potential overreach
What? The same EPA that was gutted by Trump? Go on, pull the other one.
that might be the first test of reigning in the unelected govt departments.
Reining in. Fucking reining. Don't use words you don't understand, it makes you look like a colossal idiot. What the fuck is your first language, anyway?
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Oh shut up. You know what he was saying. There was nothing wrong with the communication your just an elitist bag of shit. Makes total sense you support un-elected unaccountable people making messing with peoples lives.
If CONgress and the Senate can't be arsed to at least vote on packages of rules suggested by the executive agencies than the agencies have no fucking business imposing them on any of us.
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Since greenwashing can pump up stock prices with no real substance behind it, think of it like their normal investigation of misleading claims. Making it possible to hide external risks to investments is not a good thing and a big part of what the SEC does.
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If the SEC wanted to stop greenwashing, they'd start by going after carbon capture scams.
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Isn't this the start of how they would do that?
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Yes, but supervising carbon capture schemes and protecting the environment is NOT the purpose of the SEC.
We already have a separate bureaucracy for that. If the EPA is not doing its job, it should be fixed or expanded or whatever.
Having the SEC do the EPA's job is the worst sort of mission creep. The result will be neither job being done well.
It is similar to how the federal government has 82 different anti-poverty programs. The result is an expensive, uncoordinated, ineffective mess.
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The SEC isn't trying to make anyone do better. Just keeping them honest on what they're actually doing. It's hard to say that's the EPA's job.
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The SEC isn't trying to make anyone do better. Just keeping them honest on what they're actually doing. It's hard to say that's the EPA's job.
It's the SEC's job to keep them financially honest, it's the EPA's job to keep them ecologically sustainable. Granted, it does a shit job of that, but that was the idea. Back when Republicans cared about science and their country, even Nixon could recognize that was necessary.
Re: Who promoted the SEC? (Score:2)
Since climate risks are rapidly becoming serious financial risks, as an investor I'd really like to know the truth. This has nothing to do with whether the company is obeying environmental regulations (EPA problem) but if they don't, its a huge risk for investors and thus the SEC is right: full disclosure is needed.
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Sustainability isn't currently mandated, for the most part. So doing something legal that causes a potential liability later is more an investment concern than a regulatory concern.
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Sustainability isn't currently mandated, for the most part.
Correct, but it was the idea behind having an EPA. You know, an Agency to Protect the Environment? Unfortunately, that idea has been watered down rather than souped up...
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Re: Who promoted the SEC? (Score:2)
The risks are unsubstantiated? You must not read a lot of news. At the very least there is a reputation risk, secondary the risk of lawsuits (this week in court: Shell. Again), even if there is no climate change.
You're pretty dumb to deny climate change when we can see it happening, but no matter. This isn't about whether climate change is real, but about whether companies are running risks. And they are, even if they don't get flooded (chip factories) or face heavy losses due to forest fires (PG&E) or
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Since it became an existential threat to every business, and since the government needs that valuable information to know how vulnerable the economy is and how effective climate change polices will be.
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Isn't that what the EPA is supposed to be for...?
What's next...adding in a bit of DHS too?
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Isn't that what the EPA is supposed to be for...?
In short, no.
Part of the SEC's job is evaluating corporations' statements regarding their viability. AGW affects that, so it has to be mentioned. Even Trump's business acknowledged that AGW was an existential threat to their seaside golf courses, and actually has sought aid for same, so frankly really everyone knows that AGW is a material threat and is therefore reasonably obligated to mention the fact in their filings.
This is the SEC doing its job, no more and no less.
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Indeed. Just fact-based risk management at work.
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They have to inform investors of their potential risk of profits and loss based on they actions they are taking. How is this not an SEC thing.
Hyperbole bs not their lane. Stop making companies tell the truth to their investors, corporate lackeys. These are the same assholes that say big government bad. Big companies pillaging there customers GOOD!
Next you will be defending comcast on their computer glitches that always add services and cost to your bill but never under charges you.
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I'm trying to remember the last time an American company booked a loss by privatizing the profits and socializing the losses. IMHO this is more properly handled by the EPA. And any kind of pollution abatement will surely be booked as a loss. (expense)
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Read the summary -- no, the *headline*. They're telling companies to *divulge their risks*.
Mandating disclosure of risks is well within the SEC's bailiwick; they're not compelling anyone to actually do anything about those risks. What happens is entirely up to the market. If the market thinks that risk changes the value of a stock, it will adjust the price of that stock accordingly. If not, the price will remain the same.
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Mandating disclosure of risks is well within the SEC's bailiwick; they're not compelling anyone to actually do anything about those risks. What happens is entirely up to the market. If the market thinks that risk changes the value of a stock, it will adjust the price of that stock accordingly. If not, the price will remain the same.
How do you quantify the risk of unpredictable future governmental intervention in your business? That is probably many company's single biggest risk.
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You use the efficient market [wikipedia.org].
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How do you quantify the risk of unpredictable future governmental intervention in your business? That is probably many company's single biggest risk.
You use the efficient market [wikipedia.org].
That seems to answer "you don't". So wasted effort then.
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Well, that's the theory under which the system operates. That theory may be wrong, but it's not tantamount to telling companies what to do *environmentally*; only with respect to disclosures. It's the investors' job to make sense of that information however they can.
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They're not. They're just asking companies to report on their environmental vulnerabilities. You know, like how vulnerable their factories and offices are to flooding, or if they're dependent on good weather, or if they need a supply of fresh water, all of which have been shown to be risks.
It's basically having a company quantify the risks it faces because investors are not able to go and evaluate it themselves - you can't go to Apple and ask to
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Since when did the SEC start managing the environmental domain?
When it started to look at risks. Environmental aspects were perceived as a minor risk before, but they are not anymore. So the SEC asks for disclosure of those now. Incidentally, banking and insurance regulators have started doing that too and also ask for explicite business risk evaluations with regards to environmental factors, at least in Europe.
No, they are not activists or green or whatever. They just understand the Science and what it potentially means.
Re: Who promoted the SEC? (Score:2)
Since environmental risks are rapidly becoming a cause for large mass action lawsuits, such as the one Shell has to contend with this week. And thus it becomes a material risk for investors.
The Dutch Central Bank has been eating this for years now. It's time investors get factual information about climate-related risk exposure.
If you don't want to read it, feel free. But I prefer to not blindly dump money in companies that have huge hidden risks.
Re: Who promoted the SEC? (Score:2)
Correction: saying, not eating. Auto correct for the win.
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Thank you Mr NPC
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In the US...what exactly would pose a risk to a company for climate releasing products?
A fine from EPA? Wouldn't the govt already know this?
I may be wrong, but as far as I know, there is no such thing as a carbon tax (or whatever a GHG is) in the US...?
Easy (Score:2)
Climate risk report:
If it doesn't rain for 50 days, we're fucked.
If it DOES rain for 3 days we're fucked.
If it snows we're fucked sideways.
Do not buy our stock if you believe in climate change.
Pollution risk report:
Cough
Cough Cough
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+1, Funny.
Would be even funnier to see how they rip a CRO an new one if he/she dares to hand in such an evaluation.
Re: The SEC can go pound sand! (Score:2)
It's pretty obvious you don't have any experience with the SEC. Or large businesses. Or investing.
Have you ever had a job that didn't involve getting naked on a stage?
ESG is making you poor (Score:2)
This is one of the many mechanism that climatophobes are using to increase the price of energy, making EVERYTHING more expensive. In this case, the goal is to cut off investment in energy, thereby choking off the flow of gas and oil. Long live Russia!