Lack of transparency on Wall Street with its closed doors, backroom deals has long been the scourge of average investors.
A congressional Democratic-sponsored bill, the Climate Risk Disclosure Act, would go a long way towards rectifying this imbalance. The legislation would assure revelation of any environmental risk associated with acquisition of securities by members of the general public. Security and Exchange Commission authorities would preside to see that they do so.
Congressional Republicans are opposed to the bill, claiming it would force companies to surrender confidential information, or worse yet, compel them to acquiesce to costly environmental regulations in anticipation of having to publicize future credible risks.
You have to ask yourself what is so objectionable about obligatory transparency? Not only is the Man in the Street alerted to environmental risk, but companies are pressured to face up to future environmental challenges if they have not done so already. Should they have failed to address future environmental risk or have withheld their evaluations from the public for whatever reason, the laggards would justifiably be dragged kicking and screaming into the 21st Century.
The Democratic proposal would require companies to disclose their climate change appraisal in an annual report. Transparency could involve projections of in-house generated greenhouse gas emissions, social costs of carbon pollution, financial obligations arising from compliance with treaties, the anticipated life cycle of future goods and services, and precautions to minimize damages from future natural disasters as well as other corrective measures. These would include any strategy for transitioning from fossil fuels to clean, renewable energy.
Such an all-encompassing Democratic-sponsored bill does not stand a chance in the current Republican-controlled Senate. But many companies, especially in the insurance field, are already anticipating climate change’s impact on future operations. Moreover, the proposed legislation does provide a baseline for Congress and other short-sighted factions in our society once they wake up to the demands of environmental reality.