The Carbon Debate

Well, things are moving along, with or without Congress. You know it's real when the SEC gets involved.

The ultimate fate of carbon policies may be up in the air. But utilities and industrial enterprises are still under pressure to report their climate-related activities to investors.

The U.S. Securities and Exchange Commission has voted 3-2 along party lines to force companies to consider their potential exposure to climate change when it comes to filing their financial statements. While the position is one that the Obama administration has advocated, its genesis formed a few years earlier as investor and environmental groups joined hands to petition the body for uniform rules.

"The transition to a carbon-constrained economy is underway, and public access to material information concerning the risks and opportunities that companies face, and their means of addressing those risks and opportunities, is vital to investors," writes the California Public Employees' Retirement System.

The group, which asked the SEC more than two years ago for guidance, says that disclosure should include corporate policies and governance structures related to climate change as well as a tabulation of the registrant's current and forecasted greenhouse gas emissions. As such, investors need to know what the potential financial risks may be along with any climate change-associated litigation. [energycentral.com]