Office of the State Treasurer

TRENTON – State Treasurer Bradley Abelow has joined more than two-dozen institutional investors, managing more than $1 trillion of assets, in calling on the U.S. Securities and Exchange Commission (SEC) to require publicly-traded companies to disclose the financial risks of global warming in their securities filings.

In a letter delivered yesterday to SEC Chairman Christopher Cox, the 27 institutional investors wrote that climate change poses material financial risks to many of their portfolio companies and that those risks should be disclosed as a matter of routine corporate financial reporting to the SEC. While some U.S. companies have voluntarily reported their climate risk to shareholders, the vast majority of businesses - including many of the country’s largest emitters of global warming pollutants - have refused to do so, citing ambiguous SEC rules governing the acknowledgment of such material dangers to shareholder wealth.

“A company’s environmental risk profile should be treated like all other factors that influence a stock’s value and be subject to disclosure in financial statements to shareholders,” said Treasurer Abelow. “As the regulator for publicly-traded companies, it is important for the SEC to take a leadership role here and make an important – if not historic -- statement about environmental governance,” he said. Treasurer Abelow oversees the New Jersey State Pension portfolio, with a market value of greater than $70 billion.

“This letter sends a clear message that the SEC needs to do more to help investors better understand the climate change-related risks that companies face, whether from direct physical impacts or new regulations,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk (INCR), which coordinated the letter.

Investors called on the SEC Chairman to:

	enforce existing disclosure requirements on material risks that are underreported, such as climate change.
	strengthen current disclosure requirements by providing interpretive guidance on the materiality of risks posed by climate change.
	require companies to include in their proxy statements shareholder proposals asking companies to report on financial risks due to climate change.

Global warming and growing efforts worldwide to address it by limiting carbon dioxide emissions presents such a trend and uncertainty, say the investors, particularly to large greenhouse gas emitting companies such as those in the electric power, auto and oil sectors. SEC rules do not clearly require such disclosure on global warming and carbon dioxide emissions, resulting in non-disclosure and uneven disclosure, said the investors.

Many of the 27 institutional investors that signed the letter have been pushing for greater climate risk disclosure from companies by filing shareholder resolutions. As a result of such resolutions and other engagement with companies, more than a dozen electric power companies, as well as a handful of auto and oil firms, have published or agreed to publish reports on their potential financial exposure from new regulations and other climate-related risks.

The letter to Cox is part of a 10-Point Investor Network on Climate Risk action plan that was endorsed by 28 European and U.S. investors at the Institutional Investor Summit on Climate Risk at the United Nations last year. The action plan calls on U.S. companies, Wall Street firms and the SEC to intensify efforts to provide investors with comprehensive analysis and disclosure about the financial risks and opportunities presented by climate change.

The 27 investors signing the letter are as follows:

Ceres is a national coalition of investors and environmental groups working with companies to address sustainability challenges such as global warming. Ceres also coordinates the $3 trillion Investor Network on Climate Risk. For more information, visit http://www.ceres.org or http://www.incr.com.