INSTITUTIONAL investors and environmental advocates are urging companies to follow a new guide on how to disclose their risks from the impact of climate change, according to a Reuters report.

With the goal of bringing greater standardization to the reporting of climate risks, the guide was put together by three companies and public-interest groups that aim to foster sustainable business practices: Calvert Investments, relief organization Oxfam America and the Ceres Coalition of investors.

The release follows by two years guidelines issued by the SEC. While the SEC guidelines do not force publicly traded corporations to assess such climate-related events as severe storms, droughts, floods and heat waves, some companies have done so anyway.

But those disclosures have not been particularly useful, Maryland State Treasurer Nancy Kopp tells Reuters.

“Among those who disclosed, they used different procedures, different rubrics, different metrics,” says Kopp. “So the idea of having some basis for comparing companies consistently is an important thing to us, to investors. Otherwise, you get a hodgepodge of data that's not useful information.”

Kopp chairs the $36 billion Maryland State Employees and Teachers Pension Fund.

“Businesses have ample opportunity to get this right by understanding the climate impacts they face and working to build resilience at the ground level,” Oxfam's David Waskow tells Reuters. “But they also face real risks if they don't see what's coming and take action.”

The recently issued guidelines note that the potential perils associated with climate change include floods, storms, changing rainfall patterns, changes in pests and disease distribution, rising sea levels and storm surges.

While climate change obviously could pose daunting challenges to companies in a wide sector of industries, including, notably, insurance companies, the report observes that the expected effects could also spur substantial investments that could benefit certain types of companies poised to take advantage. For example, with a looming water crisis, there is an urgent need to invest in water infrastructure, the report notes.

Special Reports /

New Guidelines Call for Companies to Disclose Climate-Change Exposures in More Standard Format

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