Former SEC Chief: Common Climate Risk Reporting Tool Important to Future Markets

Nov 7, 2016 5:05 PM ET
Article

Originally posted on Exchange Monitor

Investors are beginning to understand the importance of recognizing the potential risks posed by climate change to companies they look to put their money into, according to Mary Schapiro, former chair of the U.S. Securities and Exchange Commission and current special adviser to the Group of 20’s Task Force on Climate-Related Financial Disclosures.

Companies have begun to try to meet the demand for climate-related risk assessments ,  but there is not yet a common tool for doing so, meaning investors don’t always get the information they need, according to Schapiro. “Investors are demanding this information. Every survey shows that a high percentage of institutional investors want better disclosure around climate-related risk, but they don’t get that disclosure, they get boilerplate, they get noncomparable numbers, so you can’t compare companies across an industry or within a sector,” Schapiro said during a discussion Monday at the Atlantic Council in Washington, D.C.

The task force is working to remedy this problem by developing “voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders,” according to the task force website.

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