Disclosure ≠ Climate Planning

Disclosure ≠ Climate Planning

This is the story of how and why a smart person completely missed the real corporate dangers of climate change.

The other day a corporate executive told me, "I've been getting board & investor pressure to disclose our climate liabilities and I think we've finally turned the corner.  We understand our liabilities now that we have a clear sense of how we impact the environment."

"Great." I said, "So what about how the environment effects you?"

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How the SEC can solve Climate Change

How the SEC can solve Climate Change

Disclosure is a good thing because it allows investors a reasonable chance to evaluate the risks involved in their investment choices. Unfortunately there's a giant hole in the middle of the disclosure process that's been exposed in the last few years.  The assumption is that transparency and disclosure allow for smart investing. While that's certainly true the wise investor also wants another piece of data: the health of the marketplace.  For this reason the SEC appears to have bought into the fallacy that systemic risks can't EVER be avoided by disclosure. This is how climate change is different.

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