Climate Change Risks and Opportunities: How Companies Can Develop Information to Comply with SEC Guidance Regarding Climate Change Disclosure
17 February 2010
By Dr. David Harrison and Andrew Foss
On 2 February 2010, the Securities and Exchange Commission (SEC) issued guidance to public companies on the SEC's disclosure requirements as they relate to climate change. This guidance reflects a growing consensus that climate change legislation and regulation, in addition to the physical impacts of climate change, could affect the operating and financial decisions as well as the future performance of many publicly traded companies. Determining whether these effects are "material" -- which would trigger disclosure -- requires systematic processes for gathering, analyzing, and documenting a substantial amount of company-specific information, as the SEC guidance suggests. In this paper, NERA Senior Vice President and Environment Group Head Dr. David Harrison and Consultant Andrew Foss outline how the NERA Carbon Financial Impacts Model -- which includes company-specific information along with a state-of-the-art economic model -- can be used to assist companies in evaluating the financial effects of climate change policies.
NERA has used the NERA Carbon Financial Impacts Model to evaluate financial impacts and implications for key decisions for companies in many sectors, including electricity, oil and gas, refining, petrochemical, cement, pulp and paper, iron and steel, chemicals, and aluminum.
The NERA Carbon Financial Impacts Model is ideally suited to assist a company in several ways:
