2009 Climate Change Study Shows Modest Increase in Reporting

October 20, 2009

McGuireWoods LLP has released its 2009 climate change disclosure study that shows a modest increase in reporting when compared to the firm’s 2008 baseline study.

The climate change disclosure study reports disclosures made in 2009 Form 10-Ks, and compares the results to 2008 disclosures. Our review compared climate change and greenhouse gas (GHG) disclosures across all companies surveyed, and separately by size and industry sector. The report also discusses influences that will affect 2010 reporting to the SEC.

Climate change disclosure practices of U.S. public companies have been gradually changing over the past several years. Possible explanations include the increasing likelihood of national regulation of GHG emissions, and growing attention to the topic by investors and the media. Another influence may be the insurance industry, which at the prompting of its regulators, is planning to seek information on this topic from its customers and investees.

However, a few public statements by a commissioner notwithstanding, the SEC has not yet called for any specific disclosures in this area or provided interpretative guidance regarding the application of existing disclosure requirements to climate change-related matters.

The clear picture that emerges from our 2009 10-K review is that through the main 2009 disclosure season – in spite of highly publicized calls for additional disclosures that have been occurring since the fall of 2007, the very real prospect of a cap and trade bill passing the Congress, and anticipation of proposed rules by the EPA requiring disclosure of GHG emissions at a significantly expanded number of facilities – very few companies outside the utilities, energy companies and industrials were making any type of climate change or GHG-related disclosures in their SEC reports. However, despite the small numbers over all, there was some increase in the percentage of companies making these disclosures in almost every industry and company size category we reviewed.

McGuireWoods LLP regularly assists both large and small public companies in connection with disclosure and compliance matters under the federal securities laws, including climate change and GHG emissions disclosure matters, and is actively engaged in monitoring developments in these areas. Our Climate Change Practice Group is made up of seasoned practitioners and consultants from our environmental, energy, corporate and securities, capital markets, litigation and government relations departments.