By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Legal Research and Writing Attorney

We discuss the status of two pending federal regulations that would require the disclosure of information concerning greenhouse gas (GHG) emissions and climate-related risks: one proposed by several agencies that would apply to federal contractors, and the other by the Securities and Exchange Commission (SEC) that would apply to public companies.

By Jeffrey Karp, Senior Counsel; Zachary Altman, Associate; and Laura Jarvis, Summer Associate

The buzz around climate change is expanding to include the potential effects it could have on businesses’ physical operations and value in the marketplace. Climate-related business risks typically fall into two categories: physical risks (extreme weather events, changes in climate patterns that can affect physical facilities and supply chains) and transition risks (the cost of transitioning to a low-carbon economy, including reputational effects).[1] As climate change can directly and indirectly impact a company’s present value and prospects for the future, the natural question follows: should companies have to disclose a broader range of risks to the public? A bill passed in the House, a recent Biden Executive Order, and actions by the Securities and Exchange Commission ("SEC") signal that the answer to that question is shifting toward "yes."