By Ann C. Logue
This week, the SEC announced something that almost seems unthinkable, for a US agency: proposed regulations requiring public companies to disclose information about any climate-related risks that could affect their operations. The European Union started asking for climate-related disclosures and financial services and support for sustainability in 2019, so many organizations are already familiar with the basics.
In the US, the proposed regulations would have registrants disclose their climate risks and any risk management processes, discuss how these could have an impact on the business and the financial statements, and identify any transition activities. This will add some additional boilerplate to the financial reports for some companies and cause major reworkings for others. The plan is so controversial that even one of the SEC’s commissioners has come out against it.
Do you have strong feelings about it one way or another? Are you investing in Miami Beach real estate, or are you looking for investors in Miami Beach real estate? The SEC comment process is open until May 22, 2022. The submission form is on the SEC website, and the file for this rule is S7-10-22. Be sure to reference the file number in your letter.
Keep in mind that SEC comment letters are available to the public. (I’ve researched them a time or two on different issues.) Your comment should thus be something that you are willing to have in circulation. If you’re feeling unsure, run it past someone on your marketing or legal staff. The best letters that I’ve read are factual, setting out why a given proposal is a good idea or a bad one. A good letter can enhance your status; a bad one can make you look wacky. Check out the letters submitted on proposed changes to rule 10b5-1, insider trading, for some examples.
Of course, you can always keep your comments anonymous.
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