Since 2010, investor demand for, and company disclosure of information about, climate change risks, impacts, and opportunities has grown dramatically.[2] Consequently, questions arise about whether climate change disclosures adequately inform investors about known material risks, uncertainties, impacts, and opportunities, and whether greater consistency could be achieved. In May 2020, the SEC Investor Advisory Committee approved recommendations urging the Commission to begin an effort to update reporting requirements for issuers to include material, decision-useful environmental, social, and governance, or ESG factors.[3] In December 2020, the ESG Subcommittee of the SEC Asset Management Advisory Committee issued a preliminary recommendation that the Commission require the adoption of standards by which corporate issuers disclose material ESG risks.[4] In 2021 public input was requested and in 2022 proposed rules were offered with respect to climate change (part of E – Environmental). Please answer the following questions providing citation to your sources.

 1 How should companies access climate risks? What should companies be doing internally to evaluate or project climate scenarios, and what information from or . about such internal evaluations should be disclosed to investors to inform investment and voting decisions? How should the information provided be verified? What do investors want to know? 

2. While Sarbanes-Oxley sought to make companies more financially responsible, it is mostly a disclosure statute with penalties. What type of penalties should be assessed for misstatements and omissions regarding a corporation’s climate risks? Should the disclosures be incorporated into a company’s annual report, or should separate reports devoted entirely to climate risks, opportunities, and impacts be required? 3. How should companies disclose their internal governance and oversight of climate-related issues? What are the advantages and disadvantages of requiring disclosed metrics (CO2 emissions, for example) to be accompanied with a sustainability disclosure and analysis section similar to the current Management’s Discussion and Analysis of Financial Condition and Results of Operations? What can Corporate Boards do to make sure that they are made aware of climate-change risks?

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