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SEC Passes New Regulation for Climate-Related Disclosures in America

Corporate America, get ready; firms to divulge climate risks, investors to see more vulnerability details.


This week our U.S. clients received word that their agency responsible for regulating the securities industry (SEC) has passed The Enhancement and Standardization of Climate-Related Disclosures for Investors (Final Rule Release No. 33-11275).

At ClimSystems, we work with both the investment side of things and with corporations, so we’ve been watching how this would play out since the idea was proposed two years ago. We certainly appreciate what this means for the over 3000 publicly traded companies that fall under the requirement; they must now disclose critical details about the threats posed by climate change to their operations. For investors, it is a ruling in favour of transparency and accountability, providing them with information that is vital for their investment decisions in a climate-changed world.

Dr. Peter Urich, Managing Director of ClimSystems, emphasises, “Investors are clear that climate disclosures are necessary to understand the current and future risks of warming to the financial condition of companies.” 

ClimSystems’ analysts monitor the global regulatory environment; we develop guidance for our clients and provide data metrics to satisfy the increasing number of national and sectoral frameworks. ClimSystems data is used by the EPA, and the US Geological Survey applies our extreme rainfall methods, so we’re tried and tested in America. Peter goes on to say, “With over 20 years in climate science and climate-related risk assessments, we were well placed when companies began their disclosure process in Europe. We innovated in the value-at-risk and disruption to service spaces as they relate to climate,  and now we can provide these quality data methods to our American clients.” 

It’s good timing; last year, the U.S. broke previous records for the number of weather disasters that cost $1 billion or more. Climate change is contributing to extreme weather events around the world as they grow in frequency and intensity and becoming more costly to business.

Mandatory climate disclosure is a change for companies, but a gain for investors.

Understand projected impacts of climate change for your assets – and the opportunities.