SEC Disclosure Requirements for Your Entity

The Securities and Exchange Commission (SEC) issued new guidance for public companies regarding disclosures related to climate change. As the U.S. EPA is taking action to reduce greenhouse gases from all sources and Congress is reviewing climate change legislation, there has been increased interest in disclosing climate change related risks by shareholders of public companies. The new rule affects public companies in the following:

• Description of business - specifically the registrant shall disclose any material estimated capital expenditures for environmental control facilities for the remainder of its current fiscal year and its succeeding fiscal year and for such further periods as the registrant may deem material.
• Legal proceedings - the registrant is to briefly describe any material pending legal proceeding to which it or any of its subsidiaries is a party. Examples include a claim for damages, potential monetary sanctions, capital expenditures, deferred charges or charges to income and the amount involved.
• Risk factors - the registrant should include a discussion of the most significant factors that make an investment in the registrant speculative or risky.
• Management's discussion and analysis - the registrant shall provide a narrative explanation of a registrant's financial statements. This should enable investors to see the registrant through the eyes of management, enhance the overall financial disclosure, provide information about the quality of, and potential variability of, a registrant's earnings and cash flow.

Public companies are advised to also include impacts from international treaties regarding climate change, costs and profits from cap and trade legislation, demand decrease from products tied to significant greenhouse gas emissions (and vice versa demand increase for low carbon products), reputation (e.g. expectance of environmental leadership), and/or physical impacts from climate change such as sea level rise and property damage. In preparing their annual reports, public companies should take note of the SEC disclosure requirements and incorporate them into their internal reporting structure.

Carbon Solutions America is an experienced carbon management firm with a strong background in greenhouse gas reporting, sustainability reporting and carbon management. Our services help companies prepare for future reporting requirements while identifying opportunities to reduce your carbon impact and create extra revenue through carbon and energy markets.