01 October 2002 21:27 [Source: ICIS news]
WASHINGTON (CNI)--Most petrochemical companies are failing to adequately report risks related to climate change and other environmental issues to their investors in violation of federal Securities and Exchange Commission (SEC) disclosure rules, an environmental group charged Tuesday.
A report released by Friends of the Earth (FoE) said a few companies in each business sector likely to be affected by climate change disclosed risks to its shareholders, but most did not.
The report examined the SEC filings of 87 publicly traded companies in the petrochemical, oil and gas, utility, insurance and automobile industries. Of those firms, only 26% provided some climate change reporting.
FoE said the petrochemical and insurance industries provided the least disclosure, with only one out of 15 petrochemical companies and one of the 14 largest property and casualty insurance companies discussing global warming in their annual SEC filings.
"While the quality of climate change reporting varied, very few companies provided quantitative information on how global warming would affect them," the report said.
SEC disclosure regulations require companies to disclose trends and uncertainties, such as potential global warming policies, that are reasonably expected to have an impact on a company's operations.
"Companies spend millions of dollars lobbying against environmental regulations that they claim could hurt business," said Michelle Chan-Fishel, coordinator of FoE's green investment program.
"A company like ExxonMobil can't tell legislators on one hand that the greenhouse gas reduction laws would spell disaster, while not disclosing this same risk to shareholders," she said.
For example, according to the survey results, DuPont's SEC filing mentions the Kyoto Protocol, the international treaty to control greenhouse gas emissions, and its likely impact on its business.
The report said DuPont describes its efforts to manage these risks, but rival Dow Chemical does not disclose any climate risks to investors.
Chan-Fishel said the results of the survey do not indicate that climate change policies "are all bad news for business, but rather that it could be bad news depending on how and when a company deal with it."
She added that companies have the opportunity to get ahead of potentially costly climate change regulations.
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