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First Affirmative Applauds SEC Decision on Climate Change Disclosures
By Steve Schueth

As an investment manager responsible for millions of dollars of client assets, First Affirmative views the SEC’s (Securities and Exchange Commission) role in protecting investors as critically important. We believe that the best way to do this is to ensure that information material to corporate performance and impact is available to all investors. That is why we have supported efforts to encourage greater transparency for many years. 

We join many of our colleagues in the sustainable and responsible investment industry and beyond in applauding this long awaited, path breaking stance from the Commission. This important new guidance from the SEC recognizes that corporations may be exposed to significant business risk as a result of climate change, and may stand to benefit greatly from newly developing opportunities. Most importantly, it acknowledges that investors need to know these things. 

Although the SEC has previously required companies to disclose possible financial or legal impacts from other environmentally related issues, this is the first official citation of climate change as a source of potential business risk or reward, and the first requirement for corporate disclosure of wide-ranging climate-related business impacts.

We strongly agree with Ann Stausboll, chief executive of the California Public Employees’ Retirement System (Calpers), the nation’s largest public pension fund who said: “Investors have a fundamental right to know which companies are well positioned for the future and which are not.”

We know that what gets measured gets managed. In requiring greater disclosure—of both risks and opportunities—it is likely that we are entering a new era of corporate management of environmental impacts. As we look to invest in companies of the future, we hope we can now count the SEC as an ally, of sorts.

Note: Mention of specific companies or securities in this blog should not be considered a recommendation to either buy or sell that security. For information regarding the suitability of any security for your investment portfolio please contact your financial advisor.

Steve Schueth, President
steveschueth@firstaffirmative.com

Posted: January 28, 2010