The SEC provided examples that might trigger disclosure by public firms:
"Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.Mary Schapiro, SEC chair, said,
"Impact of International Accords. A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.
"Indirect Consequences of Regulation or Business Trends: Legal, technological, political, and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.
"Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business."
"It is neither surprising nor especially remarkable for us to conclude that of course a company must consider whether potential legislation -- whether that legislation concerns climate change or new licensing requirements -- is likely to occur. If so, then under our traditional framework the company must then evaluate the impact it would have on the company's liquidity, capital resources, or results of operations, and disclose to shareholders when that potential impact will be material. Similarly, a company must disclose the significant risks that it faces, whether those risks are due to increased competition or severe weather. These principles of materiality form the bedrock of our disclosure framework."On the other hand, another commissioner, Kathleen Casey, opposed the interpretative guidance and said (according to The Wall Street Journal, Jan. 28, 2010),
"I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise."The bottom line is that this guidance by the SEC is yet another matter to be taken into consideration when publicly-traded firms prepare disclosure documents. The firms will obviously need experts to help them navigate these waters.