Client Alert

SEC Issues Guidance Regarding Disclosure of Climate Change Risks

February 11, 2010

Tom Mounteer and Sanjay Ranchod

On February 2, 2010, the Securities and Exchange Commission (SEC) issued interpretive guidance on how existing risk disclosure rules apply to matters related to climate change. Companies subject to disclosure obligations who have not yet submitted their Form 10-K annual reports for fiscal year 2009 should consider the new guidance as they are preparing these reports.

The SECs action is intended to provide clarity and lead to more consistent application of disclosure requirements; it does not change the materiality standard for risk disclosure in the reports of public companies filed with the agency. While in many cases the impacts of global climate change on a companys business remain speculative, issuance of the new guidance indicates the SECs preference for more robust disclosure of climate risks and opportunities.

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