The latest development in climate change litigation came out of last week’s Eastern District of Pennsylvania dismissal – spurring more speculation that these issues will eventually be appealed to and decided by the U.S. Supreme Court. This is one of several novel cases around the country attempting to hold the federal government responsible for climate change.

The decision comes on the heels of a similar, closely watched, and highly publicized suit filed by 21 minors – Juliana v. U.S. – in which  an Oregon federal judge denied a comparable motion to dismiss, but granted interlocutory appeal, opening the door for it to be presented to the Ninth Circuit.
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The arrival of a new year marks the beginning of the annual proxy season. And this year, shareholders can expect to see a lot more climate change disclosure in 2017 corporate financials.

Companies now have guidelines to help do that. In June 2017, the Financial Stability Board’s (FSB) Task Force on Climate-related Financial Disclosures (TCFD) issued voluntary disclosure recommendations, so companies can provide shareholders with information about the business risks, opportunities, and impacts posed by climate change. The TCFD is an international coalition of business, government, and financial leaders tasked with developing voluntary disclosure recommendations to help companies identify, report, and protect against climate risks. The voluntary recommendations are designed to “foster shareholder engagement and broader use of climate-related financial disclosures, thus promoting a more informed understanding of climate-related risks and opportunities by investors and others.”  Id. at iv.  The TCFD emphasizes that disclosure should be made according to each jurisdiction’s requirements and that the guidelines do not replace existing law.
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As President Trump’s administration attempts to dismantle President Obama’s Climate Action Plan, one action may be removing funding from the Securities Exchange Commission (SEC) for enforcement of the 2010 Commission Guidance Regarding Disclosure Related to Climate Change. So, should public companies continue to disclose climate change-driven risks and benefits?

Yes – according to the SEC, the climate change disclosure guidance merely “assists companies in satisfying” their pre-existing requirements concerning disclosure of environmental issues, affirming disclosure obligations in place since the 1970s. By following the guidance, companies merely will be supplying information about climate change that may impact investors’ decision-making.
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On March 28, 2017, President Trump signed an executive order (EO) called “Promoting Energy Independence and Economic Growth.”  The EO rescinds a host of climate change-related policies and rules instituted by the prior administration, including the Clean Power Plan and the Climate Action Plan. This new energy policy promotes all forms of domestic energy, and, as President Trump stated in the rollout, American energy dominance. The EO, through five policy statements, directs all federal agencies to identify and revise or revoke any rule that “burdens” the energy industry.

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