Dive Brief:
- Companies annually pay on average $677,000 for reporting on the risks from climate change, according to results of a study released as the Securities and Exchange Commission (SEC) pushes forward with a proposal to require detailed climate-related disclosures.
- The study includes two cost categories excluded in SEC calculations and so exceeds the agency’s average annual cost estimate of $530,000. Absent the two categories, the average annual cost for a company is $533,000, according to SustainAbility Institute at ERM, which conducted the study.
- The study “helps clarify where the market is already placing its climate disclosure bets,” according to Isabel Munilla, director of U.S. financial regulation at Ceres, which commissioned the survey. “The study’s quantitative estimates of investor status quo costs illuminate the disclosure reality on which SEC rules are being built.”
Dive Insight:
SEC Chair Gary Gensler in March released an agency proposal that companies follow detailed rules for reporting on climate risk, asserting that businesses and investors will benefit from clear, uniform disclosures on the costs from global warming.
Under the proposal, companies would need to describe on Form 10-K their governance and strategy toward climate risk and their plan to achieve any targets they’ve set for curbing such risk.
Companies would also be required to disclose their greenhouse gas emissions, either from their facilities or through their energy purchases, and obtain independent attestation of their data and estimates. The proposal is subject to a public comment period ending June 17.