What if Companies Had to Disclose Their Climate Risks?

The climate crisis is going to hit all of us, and that includes some of our “favorite people”: corporations.

I’m not trying to talk you into feeling bad for the welfare of corporations since corporate greed is the main factor, but it’s ridiculous to pretend that they are some out exempt from the consequences that will arise on a hot, unstable planet.

That’s why, as Politico reports, several leading Democrats have proposed plans to require companies to disclose just how climate change could put their finances and operations at risk. The Securities and Exchange Commission already has rules dictating that companies must make shareholders aware of plausible future risks, but they’ve gotten off easy when it comes to factoring climate change into the equation.

On the one hand, you may be saying, “Oh yes – let’s make sure the shareholders know about the risk of climate change. We’re all very much in danger, but wouldn’t it be terrible if some wealthy people lost money with a bad/unconscionable investment?”

On the other hand, the fallout from these disclosures can only help the environmental movement. I can’t promise that certain corporate Democrats aren’t pursuing this as an act of compassion for their rich and powerful friends, but giving adequate warning to investors that fossil fuel companies are inevitably going to get dumped in favor of renewable sources is a good way to lower their impact sooner, rather than later.

While fossil fuel companies would probably be hit the hardest with these disclosures, those aren’t the only corporations that would have to consider the long-term impacts on their finances. Companies that rely on fossil fuels at various points in their production chain and have major investments in fossil fuel holdings — i.e. many or most corporations — would also have to give climate change consideration in their reports.

One of the consequences is that, with accurate consideration of how global warming will impact the future, companies could see their credit ratings drop. That’s a good incentive to make companies switch to renewable energy sources sooner — but one that could heard companies’ ability to borrow at low rates in the meantime.

Obviously, that means companies are outraged by the notion. They’re lobbying politicians hard to keep stricter climate-related disclosures off the books so they can keep doing business as if the world isn’t going to burn down.

With all of its influence — money, that is — the corporate pressure could very well win out, and they could continue to pretend that climate change won’t be a major problem for the future of their businesses. Still, it’s a worthy fight for the Democrats to take on — because, if successful, the repercussions could be significant.

Among the Democrats calling for this change are several presidential contenders including Sen. Elizabeth Warren, VP Joe Biden — who says he’d make the change on his first day via executive action — Rep. Beto O’Rourke and Gov. Jay Inslee. Outside of the primary contest, Senator Brian Schatz, a Democrat representing Hawaii, also explained the importance of the plan:

[Companies] don’t need to be climate warriors, but they should be warriors for shareholders understanding the risk associated with their investments. If they’re not requiring one of the fastest growing risks to be accurately accounted for, then they’re not doing their job.

When you remember that 71 percent of the world’s carbon emissions come from just 100 major companies, why not start hitting the worst offenders where they’ll actually care: their wallets and relationships with their shareholders. Hopefully, this mission is something the Democrats will actually be able to get done!

Photo Credit: Bob Blob/Unsplash

95 comments

Alea C
Alea C20 hours ago

I hate "what if" because all I can think about is WHAT IF BERNIE HAD WON THE ELECTION????

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Alea C
Alea C20 hours ago

Saving the rain forest by commenting here!!!!

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Alea C
Alea C1 days ago

Care2 is still giving commenting points. (I said earlier that Care2 wasn't but I was wrong.

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Alea C
Alea C1 days ago

Care2 is still giving commenting points. (I said earlier that Care2 wasn't but I was wrong.

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Dr. Jan Hill
Dr. Jan Hill2 days ago

YES

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Alea C
Alea C2 days ago

I want to help save the rain forest via butterfly credits, and if that means I have to come here every day to comment on all these old articles then so be it.

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Alea C
Alea C2 days ago

I want to help save the rain forest via butterfly credits, and if that means I have to come here every day to comment on all these old articles then so be it.

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Dr. Jan Hill
Dr. Jan Hill3 days ago

thanks

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Alea C
Alea C3 days ago

Butterfly points.

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Alea C
Alea C3 days ago

I hate playing the "what if" game because I always end up saying the same thing: What if Bernie Sanders had been elected?

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