Climate Change Disclosures Are Getting Hotter

Abstract

Since the publication of climate change disclosure guidance by the Securities and Exchange Commission (SEC) in 2010, the number of 10‐K disclosures has seen more than a twofold increase. Climate change disclosures are disclosures of risk from severe weather events and pollution, although a company may also report opportunities arising from climate change. In general, companies reporting weather risks disclose the potential for property damage and/or temporary loss of business. Companies with significant greenhouse gas and other nuisance emissions disclose risks due to litigation and the cost of compliance with regulations imposed by governmental bodies. A few companies have disclosed opportunities arising from climate change including initiatives to develop plant‐based plastics and renewable energy sources. The article provides a portrait of compliance with an emerging area of corporate risk disclosure. © 2016 Wiley Periodicals, Inc.