Jenner & Block: The New SEC Guidance on Climate Change Disclosure: What You Need to Know

Jenner & Block: The New SEC Guidance on Climate Change Disclosure: What You Need to Know

"On February 2, 2010, the Securities and Exchange Commission ("SEC") issued guidance, in the form of an interpretive release (the "Release"), as to a public company's disclosure requirements on climate change issues," reports this commentary from Jenner & Block. "The SEC puts companies on notice that it will review the effect of the Release on companies' filings through its disclosure review program. This Release should be considered in the context of the SEC staff's recent reminders that their review will look beyond the four corners of a company's SEC filings, including considering disclosures in a company's earnings calls, earnings releases, website and press releases. The SEC expects to hold a public "roundtable" on climate change disclosures in the spring of 2010."

The authors of this commentary, Jerry J. Burgdoerfer, Gabrielle Sigel, William L. Tolbert Jr., Elaine Wolff, and Lee E. Dionne, explain that the "Release discusses four non-exclusive categories of climate change information that companies should evaluate for materiality in order to determine whether disclosure is required:

  • the impact of legislation and regulation;
  • the impact of international accords;
  • the indirect consequences of regulation or business trends; and
  • the physical impacts of climate change."

The commentary notes that the "Release features a discussion of the state, national, and international response to climate change, particularly through the restriction or disclosure of greenhouse gas ("GHG") emissions." In addition the "Release is a reminder that for some companies, regulatory, legislative and other developments could have a significant effect on results of operations and operating and financial decisions, and should be disclosed or considered for disclosure in SEC filings."

This commentary discusses the Release's presentation of: (A) its purpose and context; (B) disclosure obligations existing under current law; and (C) the climate change information companies should consider disclosing in their filings. The article concludes with Practice Pointers for public companies to consider in light of the new guidance.

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