December 20, 2019

The Climate Risk Disclosure Acts of 2018 and 2019: Should Publicly Traded Companies Be Required to Disclose Climate-Related Risks?

Jehmal Terrence Hudson

Climate change is one of the most vital issues facing the world today. The public is becoming familiar, at least nominally, with some of the more commonly reported hallmarks of climate change such as shifting weather patterns and their effects on vulnerable populations. The enhanced severity of weather-related events due to a warmer and, in certain locations, wetter atmosphere, including wildfires, storms, and coastal flooding, presents increasing challenges to municipalities, states, and countries.

Corporations are also facing increasing challenges, especially public companies. This is because climate change–related events and governmental responses can affect business operations, physical assets, and supply chains, adversely affecting share price. Shareholders, institutional investors, and other stakeholders are taking increasing notice of how climate change may impact a public company’s stock value. They are scrutinizing the extent to which potentially affected companies are tracking, measuring, quantifying, and disclosing these risks in annual and other filings submitted to the Securities and Exchange Commission (SEC or Commission). 

Premium Content For:
  • Current ABA Member
Join - Now