Climate Change Financial Risk Disclosure: Emerging Trends

Strategies to Meet Heightened Shareholder Demands and Corporate Reporting Requirements

NY AG settlements may set new standard for environmental risk reporting

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, February 17, 2009

Program Materials

This seminar will examine the climate change risk that companies must disclose in SEC filings and to shareholders, the settlement agreements reached by Xcel and Dynegy and the Office of the New York Attorney General regarding such disclosures, and best practices for meeting disclosure requirements.

Description

The environmental impact of a company's operations and compliance with government regulations involves serious financial risk for businesses. Climate risk disclosures are increasing due to shareholder demands, current SEC standards, and state and federal government regulations.

For example, the New York Attorney General recently pursued and reached settlements with Xcel Energy and Dynegy Corp., with both companies agreeing to extensive shareholder disclosures of the potential business and financial impact of climate change.

In light of these rapidly emerging trends, companies and their counsel must evaluate the climate risks associated with business operations and develop systems for reporting the risks to government agencies and board of directors and shareholders.

Listen as our authoritiative panel examines current requirements for climate change risk disclosure to shareholders and government agencies, reviews the New York attorney general's settlements with Xcel and Dynegy to disclose such risks to shareholders, and offers best practices for meeting the new disclosure requirements.

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Outline

  1. Disclosure under the current regulatory environment
    1. SEC’s materiality standard
    2. Requirements relating to material contingent liabilities
    3. Regulation S-K line item disclosure requirements
    4. Treatment of environmental liabilities on company balance sheets
    5. Rule 408(a) of the Securities Act of 1933
  2. Xcel agreement – a model for other companies?
    1. Analysis and disclosure of material financial risks associated with existing (and future) laws and regulations relating to GHG emissions
    2. Analysis and disclosure of materials financial risks from litigation and court decisions related to climate change that will have a financial effect on the business
    3. Analysis and disclosure of material financial risks from the physical impacts associated with climate change
    4. Strategic analysis of climate change financial risks and emission management
  3. Best practices for meeting disclosure requirements
    1. Factors to consider when re-evaluating environmental disclosures
    2. Analyzing current and existing laws that apply to a business and its operations
    3. Monitoring court decisions more closely
    4. Assessing the physical impacts of climate change and other environmental matters
    5. Protecting competitively sensitive information

Benefits

The panel will review these and other key questions:

  • What climate change risks are companies required to disclose under current state and federal laws and regulations?
  • What can companies and counsel learn from the NY Attorney's General's investigations and settlements with companies regarding climate risk disclosures?
  • When does climate change risk constitute new "material" risks and opportunities for companies that requires reporting under current SEC regulations?
  • What steps can companies and counsel take to minimize the risk that more extensive disclosures will expose them to civil litigation?

Faculty

Jeffrey A. Smith
Jeffrey A. Smith

Partner
Cravath Swaine & Moore

His practice encompasses environmental matters relating to financings, underwritings and mergers and acquisitions in...  |  Read More

Scott D. Deatherage
Scott D. Deatherage

Partner
Thompson & Knight

He leads the Climate Change and Renewable Energy practice and advises on climate change and greenhouse gas legislation...  |  Read More

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