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CERES News Release

Major Investors, State Officials, Environmental Groups Petition SEC to Require Full Corporate Climate Risk Disclosure

September 18, 2007


(Washington, DC) -- A broad coalition of investors, state officials with regulatory and fiscal management responsibilities, and environmental groups today filed a landmark petition asking the Securities and Exchange Commission (SEC) to require publicly-traded companies to assess and fully disclose their financial risks from climate change. Also today, the coalition formally asked the Commission's Division of Corporation Finance to immediately begin "[c]losely scrutinizing the adequacy of registrants' climate disclosures" under existing law.

In addition to Environmental Defense and Ceres, the 22 petitioners include leading institutional investors in the U.S. and Europe managing more than $1.5 trillion in assets. The signers include the California State Treasurer Bill Lockyer, Florida Chief Financial Officer Alex Sink, Maine State Treasurer David G. Lemoine, New York State Comptroller Thomas P. DiNapoli, North Carolina State Treasurer Richard Moore and Oregon State Treasurer Randall Edwards, as well as New York State Attorney General Andrew M. Cuomo.

The first-of-its-kind petition cites unequivocal scientific evidence, far-reaching regulatory developments and extensive business recognition that the risks and opportunities many corporations face in connection with climate change are material to shareholder investment decisions and must be disclosed under existing law.

"Smart companies know that profits and jobs come from solving problems, not ignoring them. Investors have a right to know who is paying attention," said Fred Krupp, president of Environmental Defense.

"The SEC needs to do more to protect investors from the risks companies face from climate change, whether from direct physical impacts or new regulations," said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk. "Shareholders deserve to know if their portfolio companies are well positioned to manage climate risks or whether they face potential exposure."

"Our marketplace cannot properly function, our retirees' pensions cannot be protected, unless investors' right to know is fully enforced," said California State Treasurer Bill Lockyer, a board member of California's Public Employees' Retirement System (CalPERS) and State Teachers' Retirement System (CalSTRS), which collectively manage more than $400 billion in assets. "We're asking the SEC to vindicate that right so investors can ensure their portfolios reflect the risks and benefits related to climate change."

"Action by the SEC on this petition would result in better, more informed decisions for Florida's investors," said Florida Chief Financial Officer Alex Sink, who serves on the board of the Florida retirement system which has $140 billion in assets.

Climate change can affect corporate performance in ways ranging from physical damage to facilities and increased costs of regulatory compliance, to opportunities in global markets for climate-friendly products or services that emit little or no global warming pollution.Those risks fall squarely into the category of material information that companies must disclose under existing law to give shareholders a full and fair picture of corporate performance and operations, the petition says.

The petition asks SEC to clarify that, under existing law, companies must disclose material information related to climate change. Depending on the circumstances, this obligation may require disclosure of the following information:

  • Physical risks associated with climate change that are material to the company's operations or financial condition;
  • Financial risks and opportunities associated with present or probable greenhouse gas regulation;
  • Legal proceedings relating to climate change.
  • Despite a groundswell of demand from investors for more information in climate risks, corporate disclosure has been scant and inconsistent. Exxon Mobil Corporation, the world's largest petrochemical enterprise, included only one cursory reference to climate change in its entire 2006 annual filing with the SEC. Allstate Corporation, which insures 1 in 8 homes in the U.S. and reported over $4 billion in losses from Hurricanes Katrina and Rita, did not mention climate change at all in its latest annual filing. A January 2007 study published by Ceres and the Calvert Group, an asset management firm, found that more than half of the companies in the S&P 500 Index are doing a poor job disclosing climate change risks to their investors. Companies in sectors with low greenhouse gas emissions, including insurance companies and banks, had especially poor disclosure.

Poor disclosure prevents investors from getting the full story. Full disclosure by Texas utility TXU on its potential exposure from climate change-related risks would have revealed the extensive financial exposure resulting from the company's proposal to build 11 new coal- fired power plants without limitations on the extensive global warming pollution. TXU's business plan would have increased carbon dioxide emissions 78 million tons annually, and invested considerable capital in long-term high-polluting resources. Investors are entitled to a rigorous assessment of regulatory and financial risks related to climate change so they can evaluate which business plans are reckless and which are prudent in managing these risks.

The petitioners today also called on the Commission to take immediate action on corporate climate disclosure as it develops the new guidance. The petitioners called on the SEC's Division of Corporation Finance to devote close attention to the adequacy of climate risk disclosures under existing regulations. Because the obligation to disclose climate related risks and opportunities exists under current law, the Division of Corporation Finance "need not and should not wait" in immediately increasing "its scrutiny of the adequacy of climate risk disclosures in corporate filings."


The 22 Petitioners are:

  1. California State Controller, John Chiang
  2. California Public Employees' Retirement System
  3. California State Teachers' Retirement System
  4. California State Treasurer, Bill Lockyer
  5. Ceres
  6. Environmental Defense
  7. F&C Management
  8. Florida Chief Financial Officer, Alex Sink
  9. Friends of the Earth
  10. Kentucky State Treasurer, Jonathan Miller
  11. Maine State Treasurer, David G. Lemoine
  12. Maryland State Treasurer, Nancy K. Kopp
  13. The Nathan Cummings Foundation
  14. New Jersey State Investment Council, Orin Kramer, Chair
  15. New York City Comptroller, William C. Thompson, Jr.
  16. New York State Attorney General, Andrew M. Cuomo
  17. New York State Comptroller, Thomas P. DiNapoli
  18. North Carolina State Treasurer, Richard Moore
  19. Oregon State Treasurer, Randall Edwards
  20. Pax World Management Corporation
  21. Rhode Island State Treasurer, Frank Caprio
  22. Vermont State Treasurer, Jeb Spaulding

About Ceres: Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a network of 60 institutional investors with collective assets totaling more than $4 trillion. For more information, visit  or

About Environmental Defense: Environmental Defense, a leading national nonprofit organization, represents more than 500,000 members. Since 1967, Environmental Defense has linked science, economics, law and innovative private-sector partnerships to create breakthrough solutions to the most serious environmental problems.




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