Blog: Corp Fin Publishes Sample Climate Comment Letter | Cooley LLP


This afternoon, Corp Fin released a letter model to companies with illustrative comments regarding climate change disclosures. Presumably, the goal is to help companies think through and craft their climate-related disclosure.

Corp Fin points out first of all that, as part of its 2010 guidance (cf. this post from PubCo), depending on the facts and circumstances, disclosure of climate change could be obtained as part of a description of a company’s activities, legal proceedings, risk factors and management’s report. Disclosure can include both physical risks and transition risks, such as

  • “The impact of existing or existing laws, regulations and international agreements relating to climate change;
  • indirect consequences of regulation or business trends; and
  • the physical impacts of climate change.

In addition, Corp Fin explains, there is a more open requirement: companies must also disclose “other material information, if any, that may be necessary to make the required statements, in light of the circumstances in which they are made,” not misleading.

The letter includes nine sample comments, some with multiple elements, covering topics such as

  • what consideration has the company given to providing the same type of climate-related disclosure in its SEC filings as it did in its more comprehensive corporate social responsibility report
  • climate-related transition risks “such as policy and regulatory changes which could impose operational and compliance burdens, market trends which may alter business opportunities, credit risks or technological changes”.
  • significant risks of climate-related litigation
  • in light of significant developments, the impact of existing or existing climate change legislation, regulations and international agreements
  • significant past and / or future capital expenditures for climate-related projects
  • indirect consequences of climate-related regulations or business trends, such as a decrease or increase in demand for goods or services based on the production or reduction of significant GHG emissions, increased competition to introduce products emissions, increased demand for alternative energy products and reputational risks resulting from operations or products that produce significant GHG emissions
  • material physical effects (including quantification of damage) of climate change such as severe weather events, sea level changes, the arability of agricultural land, extreme fires, and water availability and quality , the indirect impact of weather conditions on major customers or suppliers, the decrease in agricultural production capacity and the cost or availability of insurance
  • quantifying the increase in climate-related compliance costs
  • physical carbon credits or offsets

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