Could the U.S. Securities and Exchange Commission finally be getting serious about the financial risks of climate change? The agency has been making moves in that direction, but to some extent it feels like déjà vu all over again.
Activists, investors and business leaders have long been calling for U.S. companies to report more thoroughly and consistently on the climate-related risks they face. The idea is that the information is crucial to assessing a company’s value: If, for example, it relies too heavily on fossil fuels, has physical assets that are exposed to flooding, or has an opportunity to profit from a shift to renewable energy, investors need to know. Proper disclosure would help the market avoid unpleasant surprises and reward companies for acting responsibly.