Public Company Disclosures in a Climate-Change Focused World

By Mick Harris

As society reckons with the enormous danger of climate change, there is no question that corporations must take responsibility for their contributions to rampant global warming, while working to reduce their emissions. For public companies or those planning to go public, this may manifest through increased pressure to provide formalized disclosures regarding climate change efforts. While the Securities and Exchange Commission (SEC) has yet to issue specific data and metrics related to climate-change, pundits are increasingly advocating for SEC action and many are predicting that the Biden administration will push for this change, as well.

Certainly, investors are becoming more vocal about precise disclosure requirements, as part of a larger emphasis on environmental, social and governance (ESG) issues. In BlackRock CEO Larry Fink's 2021 letter to CEOs, he said: “…No issue ranks higher than climate change on our clients’ lists of priorities….Because better sustainability disclosures are in companies’ as well as investors’ own interests, I urge companies to move quickly to issue them rather than waiting for regulators to impose them….If we want these disclosures to be truly effective—if we want to see true societal change—they should be embraced by large private companies as well,” he said. BlackRock is a prominent global asset management company known for its investor activism.

So how should companies prepare for climate-related disclosure requirements when official guidelines do not exist? There is some guidance available. For example, the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB) both offer solid direction, although companies should be creative and proactive in how they can disclosure relevant, climate-change information to investors. Disclosures can be cumbersome—particularly when they aren’t fully defined—but they serve a valuable purpose and companies should take them seriously. As the idea of climate change disclosures gains traction with investors, it will be advisable for companies to show how the issue is being incorporated into the fabric of long-term business strategies.

Overall, climate-change issues are increasingly seen by investors as a reflection of future risk so a lack of disclosure could negatively impact stock prices for public companies or trim overall business valuations for both public and private companies.

Management teams and boards that are attuned to these concerns will distinguish themselves in shareholders’ minds and build confidence. Businesses that choose to wait for official SEC guidance could find that shareholders—in addition to their values-based concerns—may lose confidence in a company’s ability to recognize the reality of climate change.

For now, the SEC has not assumed the role of enforcer—and it may never take an official stance—but investors are paying attention and are increasingly asserting their own enforcer role, so climate change disclosures should be seen as a mandate.

Mick is an associate in Tonkon Torp’s Business Department where he provides business-minded solutions to both public and private companies. He can be reached at 503.802.5765 or

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