Former Treasury Chiefs Agree: Get the SEC Into the Climate Mix

PhotoXpress

A bipartisan pair of former Treasury secretaries want the Securities and Exchange Commission to get more aggressive with corporate America when it comes to assessing the risks of climate change.

Robert Rubin and Henry Paulson—who served under Presidents Clinton and George W. Bush, respectively, and who both have deep Wall Street ties—said Tuesday that the SEC should do a better job of forcing companies to disclose the economic fallout they face from climate change.

Rubin said companies, in filings with regulators, should be disclosing information such as assets that may be "stranded" someday due to climate change. They also urged them to disclose the "baseline" ways climate change may affect their business and emissions they may be "accountable" for at some point.

"If businesses had to disclose that, then that would become an incentive for business to act," said Rubin, a top Goldman Sachs official before joining the Clinton administration, and who later served on Citigroup's board for a decade.

Rubin spoke during the New York City rollout of a report called "Risky Business: The Economic Risks of Climate Change to the United States," which aims to quantify risks to coastal infrastructure, crops, labor productivity, and more.

It's the fruit of a group called the Risky Business Project led by Paulson, former New York City Mayor Michael Bloomberg, and billionaire former hedge-fund chief Tom Steyer. Rubin is among the group's advisers.

Paulson made a similar point Tuesday about the SEC, noting "perhaps the SEC should be requiring disclosures."

The SEC already does require them, but activists say it's a largely toothless program thus far, and it's providing little information to investors.

In 2010, the SEC issued guidelines about how publicly traded companies should be describing various types of risks from climate change under existing disclosure rules, such as how state and federal climate policies will affect them and the physical effects of climate change.

But in an early 2014 report, the sustainable-investment advocacy group Ceres said that despite the 2010 SEC policy, most large companies (they looked at the S&P 500) are saying little to nothing about the climate risks in their SEC filings. And the SEC isn't doing much about it, the group said.

Rubin seems to agree. In fact, the Ceres analysis is referenced in the Risky Business report. In a New York Times piece about the report, Rubin told the newspaper that the disclosures are often vague and inadequate.

The Risky Business report itself is a detailed regional look at economic vulnerabilities to climate change.

"Until today, we have had no ways to measure the serious risks to our national economy ... from climate change," Bloomberg said during the report's release in New York. "Businesses and investors have largely been kept in the dark about how climate change will impact specific industries or specific regions, and that puts American businesses and the American economy in an extremely vulnerable position."

For instance, it notes projections that the Southeast is due to experience as many as several dozen more days over 95 degrees annually by mid-century and many more by century's end. This could cut labor productivity by up to 3.2 percent in sectors like construction, agriculture, and manufacturing.

Nationwide, between $66 billion and $106 billion worth of existing coastal property will likely be below sea-level by mid-century, the report finds.

The report has the attention of the White House. Paulson, Steyer, and others involved with the report will meet Wednesday with Treasury Secretary Jacob Lew and "senior" White House officials, the White House said.

It's one of several climate-related events on the White House calendar this week. On Wednesday night President Obama will speak at a League of Conservation Voters dinner.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

When you download a report, your information may be shared with the underwriters of that document.