A nonprofit group that sets standards for disclosing the financial impact of environmental issues is calling on U.S. companies to account for the effects of climate change on their businesses.
The Sustainability Accounting Standards Board released a report on Wednesday saying climate change will affect 72 of 79 U.S. industries and cost U.S. companies more than $27 trillion — 93 percent of the U.S. equity market.
In the report, former Treasury secretaries Henry Paulson and Robert Rubin call climate change “the single biggest economic risk the world faces today,” and chide U.S companies and the Securities and Exchange Commission for disclosing those risks “poorly, if at all.”
In July, Paulson, a Republican, and Rubin, a Democrat, sent a letter to the SEC, urging it to enforce “mandatory and meaningful disclosures of the material effects of climate change on issuers.”
At the same time, 45 investors representing $1.1 trillion in assets, including CalPERS, the largest public pension fund in the United States, also asked the SEC to require companies to more thoroughly assess and disclose financial risks from global warming.
In Tuesday’s report, the San Francisco-based Sustainability Accounting Standards Board said climate impacts are so widespread, investors cannot “diversify away” from the risks.
Paulson and Rubin called the report the first comprehensive guide to understanding and measuring the impacts of climate change across industries.