Grist, one of our partners on The Climate Desk, hosted a panel earlier this week about the new SEC ruling that urges companies to report risks associated with climate change. Panelists included Kristen A. Sheeran, an environmental economist, Julie Gorte, a sustainable investor, and Sara Robinson, a fellow at the Campaign for America's Future.
The transcript can be found here, but we've selected a few choice quotes below:
The SEC is kind of like a super-tanker: it doesn't turn on a dime, and it probably shouldn't. I think it does wait for issues to reach the level of concern or consciousness among a significant number of financial institutions before it acts. And that's true of a lot of public policy. There was also an election, if you remember, a couple years ago that changed the makeup of all the executive [branch of government], including the SEC. So, we did have sort of a political change in America, as well as a rising tide of investor concern and sentiment regarding the materiality of climate change.
Kristen A. Sheeran:
There's this misperception amongst many that corporate America is opposed to actions that would deal with the climate change problem head on, and it's simply just not the case. With the exception of the fossil-fuel industry and a few others who have very vocally opposed any pro-active measures in the U.S. to deal with climate change threats, most of corporate America realizes that the greatest risks of climate change come from its physical impact rather than from regulations per se. Whether you're talking about big companies like Microsoft, Nike, Coca-Cola, Starbucks, these are just a few examples of businesses that have come out and openly supported immediate and aggressive actions to prevent climate change and have lobbied Congress in that regard. What business hates most is uncertainty. Business in America has been asking our elected leaders for clear and consistent rules, and clear and consistent pricing over carbon so they can plan ahead effectively.
What this will do is increase the trend of raised awareness toward climate change. Once that awareness is raised, investors start to act on that information. They say, 'If you're in this sector and aren't aware of climate change, we don't think you're a terribly well-managed company.' So you're a little less willing to pay more for their earnings. The great secret about financial markets is that, in some sense they [create] a self-fulfilling prophesy. If we all, as investors, think that companies that are environmentally well-managed are going to perform better, we'll pay more for them and they will trade at a premium. They will be worth more because of their environmental management.