The U.S. Securities and Exchange Commission's new climate change disclosure guidance, which now requires businesses to report on how climate change will impact their businesses, poses new challenges for them.
Robert O'Connor, head of the clean tech practice at Wilson Sonsini Goodrich & Rosati told Law.com that companies will need to have the infrastructure in place to know whether there is something to disclose and they need to find out if they are responsible for all or some of the carbon emissions in their supply chains.
O'Connor said in the article that the biggest risks would be if a global climate treaty or a carbon tax passes.
The investment community including the Investor Network on Climate Risk, CalPERS and the Environmental Defense Fund, has been urging the SEC to issue guidelines on climate change since last year.
The commission published the guidelines (PDF) this week (Feb. 8), which are effective immediately, reports Law.com.
The guidelines provide businesses with four areas where climate change could trigger disclosure requirements, reports Law.com. They are legislation and regulations, international accords, indirect consequences of regulation and business trends, and physical impacts of climate change, according to the article.
