Vague Climate Statements a No Go with the SEC

Research from our CompanyIQ® SEC Comment Letters database indicates that one-third of S&P 500 Comment Letters released over the past 90 days (12/4/21-3/4/22) were related to climate change.

Specifically, out of 31 companies that received a SEC Comment Letter, the SEC asked the following 10 companies for additional information on climate disclosures:

1) Cintas
2) Cisco
3) Discover Financial Services
4) Meta Platforms
5) Monster Beverages
6) Progressive Insurance
7) Charles Schwab
8) Snap-On
9) Target
10) Under Armour.

Consistency with CSR (corporate social responsibility) reports and detail on weather-related damage are among the topics the SEC wants to see more disclosure on in 10-Ks.

Here are a few examples of climate-related comments from the SEC.

Target

9/22/21
Comment Letter
Consistency with CSR/Website Statements

“We note that you provided more expansive disclosure in your CSR report than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in your CSR report.”

 

Charles Schwab

9/23/21
Comment Letter
Weather-Related Damage

“If material, discuss the significant physical effects of climate change on your operations and results. This disclosure may include the following: severity of weather, such as floods, hurricanes, sea levels, extreme fires, and water availability and quality; quantification of material weather-related damages to your property or operations; potential for indirect weather-related impacts that have affected or may affect your major customers or suppliers; and any weather-related impacts on the cost or availability of insurance.”

 
As the Wall Street Journal noted, "the inquiries come after the SEC in September published a list of requests its staff had sent to executives related to a 2010 guidance document on climate-change disclosures."

For details, please see our report.