The SEC Division of Corporation Finance recently released a sample letter, which includes illustrative comments the Division may issue to companies regarding their climate-change-related disclosure or the absence of such disclosure. In releasing this sample letter, the SEC stated the letter does not constitute an exhaustive list of the issues companies should consider and that comments issued would be appropriately tailored to the specific company.
As summarized in the SEC’s 2010 Climate Change Guidance, a number of SEC disclosure rules may require disclosure related to climate change. Depending on the particular facts and circumstances, information related to climate-change-related risks and opportunities may be required in disclosures related to legal proceedings, risk factors, management’s discussion and analysis of financial condition and results of operations, and a company’s description of its business. Disclosure matters discussed in the 2010 Climate Change Guidance include:
- The impact of pending or existing climate-change-related legislation, regulations and international accords;
- The indirect consequences of regulation or business trends; and
- The physical impacts of climate change.
In addition to the information expressly required by SEC regulation, companies must disclose, “such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.”