What Next? After SEC Climate Action, ICCR/Trucost 'Climate Risk Profiles' Are Best Way for Investors to Get Information Before Mandated Disclosure Beg

Now that the U.S. Securities and Exchange Commission (SEC) has decided that climate-related risks are material information that publicly traded companies must disclose to investors, what do investors do in the several months it will take for the disclosures made by companies to catch up with the SEC rule? This "lag time" is of particular concern since a relatively small percentage of companies were voluntarily making climate-related disclosures prior to the SEC ruling yesterday, according to the Interfaith Center on Corporate Responsibility (http://www.iccr.org), a coalition of approximately 300 faith-based institutional investors, representing well over $100 billion in invested capital.

The good news is that ICCR and Trucost, an independent environmental data company with offices in London, New York, and Boston, have for the last year made available "Climate Risk Profiles" on more than 150 major companies, with a particular focus on companies facing proxy resolutions from religious shareholders. The profiles are available at http://www.iccr.org/shareholder/trucost/index.php.

ICCR Executive Director Laura Berry said: "Religious shareholders have been on the cutting edge of the pressure for climate-related disclosure. We filed the first climate-related proxy resolutions nearly 20 years ago in 1991. And we joined with Trucost a year ago on February 5, 2009 to launch the 'Climate Risk Profiles.' Yesterday's SEC action is wonderful news for shareholders who are committed to seeing to it that America's largest companies put all of their cards on the table when it comes to the risks associated with climate change. Over the last two decades, we have seen the receptivity to the notion that such disclosure is needed move from outright derision to mainstream acceptance."

Berry added: "Until the practical impact of the SEC action is translated into a new wave of disclosure, we want to make sure that investors know that our 'Climate Risk Profiles' are available to them."

ICCR and Trucost launched the "Profiles" in February 2009 so that shareholder advocates and other investors will no longer have to rely solely on claims by leading publicly traded companies when it comes to determining exposure to risks associated with greenhouse gas (GHG) emissions that contribute to climate change.

The independent "Climate Risk Profiles" on more than 150 corporations – from Abbott Laboratories to Yum! Brands – initially focused on the subjects of 2009 shareholder resolutions filed by faith-based investors, public pension funds and other responsible investors. The shareholder resolutions cover a wide range of issues, including climate change, and were filed with companies in all sectors of the economy.

The climate change indicators for the companies were developed using data from Trucost, which maintains the world's largest record of greenhouse gas emissions, as well as over 700 environmental indicators including water use, waste disposal and pollutants that cause smog and acid rain.

Each of the "climate risk profiles" takes into account whether or not a company discloses the greenhouse gas emissions from its operations and the percentage of the company's deviation in GHG emissions from the sector average compared to its closest industry peers. For companies that do not disclose GHG emissions, Trucost calculates their emissions based on its research and methodology.

ICCR's Berry said: "Even religious investors are unwilling to simply take on faith the past assurances of companies that have maintained they do not need to disclose climate-related risks. Thanks to the Securities and Exchange Commission, institutional investors can now adopt a 'trust, but verify' approach to dealing with potential dangers posed by climate risks. We see this watershed development for environmental transparency as opening the door to more transparency in other aspects of future risks. We believe that the SEC's action this week will go a long way to casting light into what are still many dark corners of danger that lurk for investors who are not getting all the facts they need to know. We want to do our part to help facilitate this important process. By holding corporations accountable through sophisticated yet easy-to-use tools such as these climate risk profiles based on Trucost data, ICCR members continue to make significant contributions to global justice and sustainability."