Investors demand inclusion of carbon data in SEC filings

Large numbers of US firms are still failing to disclose basic information on their carbon emissions, according to two new investor reports out this week calling on the Securities and Exchange Commission (SEC) to deliver formal guidance on how firms should report on their climate change strategies.

"These findings are a clarion call for quick SEC action to require better climate risk disclosure from publicly traded companies," said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, which is a group made up of 80 institutional investors with around $7tr (£4.3tr) in assets. "Climate change is a bottom-line issue and investors have a right to know which companies are best positioned for the emerging clean energy global economy."

The two studies – Climate Risk Disclosure in SEC filings, an investigation of SEC filings in 2008, and another year-long study of climate-related reporting Reclaiming Transparency in a Changing Climate – argue many companies are not meeting the needs of investors when it comes to disclosing information around climate change. The studies were supported by investor group Ceres, green campaigners Environmental Defense Fund and the research organisation the Center for Energy and Environmental Security (CEES).

"Corporate climate disclosure falls far short of what... investors need to carry out their fiduciary duties," said Anne Stausboll, chief executive of the California Public Employees' Retirement System (CalPERS), the largest public pension fund in the US and one of 18 investors that petitioned the SEC in 2007 to issue climate disclosure guidance. "We call on the SEC to ensure that information regarding climate change effects, including regulatory and physical impacts, are accessible and delivered to investors."

The Climate Risk Disclosure study looked at carbon and other related reporting from a variety of industries including electric utilities, coal and transportation and insurance. It found that despite some high-profile commitments to addressing climate change risk, the insurance sector had the least transparency about its environmental performance.

"Although prudent risk assessment is the basis for a viable insurance industry, the 27 companies studied in this sector provided the least disclosure compared with other sectors," the report stated. "Eighteen (67 per cent) had no mention of climate change or related risks anywhere in their SEC filings; 24 out of 27 companies (89 per cent) omitted disclosure on actions to address climate change."

The other report, Reclaiming Transparency in a Changing Climate, reveals a "troubling pattern of silence on climate-change-related issues" according to the report's author Kevin Doran. "To effectively build the new energy economy, investors need to know who's planning for the future and who isn't," he said. "Investors should not have to guess at the meaning of corporate silence."

The latest calls on the US government to act on climate change reporting follow similar requests from investors groups over the last few years.

Back in 2007, Ceres put pressure on the US congress to act on the issue and last September, investors claiming to control more than $700bn in assets argued that the SEC should compel oil and gas companies listed in US markets to include the cost of climate change when estimating the potential of future reserves.