Company boards are facing greater pressure to disclose climate risks

As reported in The Wall Street Journal, companies are preparing to receive a record number climate-related shareholder proposals this proxy season, as major institutional investors, most notably, State Street, Vanguard and BlackRock, seek more disclosure on how climate change will affect the company’s operations. While disclosure remains voluntary and inconsistent, the SEC does not seem inclined at this time to mandate added disclosure requirements specific to climate change. Numerous institutional investors, particularly those who are fiduciaries, view climate change as presenting a material risk to portfolio performance, as well as a source of alpha.