U.S. Securities and Exchange Commission Recommends That Publicly-Traded Companies Disclose Climate Change Risks

The U.S. Securities and Exchange Commission (SEC) recently recommended that publicly-traded companies provide information about climate change-related risks associated with their businesses. The SEC's "interpretative guidance" creates no new legal requirements but is "intended to provide clarity and enhance consistency for public companies and their investors."

The SEC provided examples that might trigger disclosure by public firms:

"Impact of Legislation and Regulation: When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.

"Impact of International Accords. A company should consider, and disclose when material, the risks or effects on its business of international accords and treaties relating to climate change.

"Indirect Consequences of Regulation or Business Trends: Legal, technological, political, and scientific developments regarding climate change may create new opportunities or risks for companies. For instance, a company may face decreased demand for goods that produce significant greenhouse gas emissions or increased demand for goods that result in lower emissions than competing products. As such, a company should consider, for disclosure purposes, the actual or potential indirect consequences it may face due to climate change related regulatory or business trends.

"Physical Impacts of Climate Change: Companies should also evaluate for disclosure purposes the actual and potential material impacts of environmental matters on their business."

Mary Schapiro, SEC chair, said,

"It is neither surprising nor especially remarkable for us to conclude that of course a company must consider whether potential legislation -- whether that legislation concerns climate change or new licensing requirements -- is likely to occur. If so, then under our traditional framework the company must then evaluate the impact it would have on the company's liquidity, capital resources, or results of operations, and disclose to shareholders when that potential impact will be material. Similarly, a company must disclose the significant risks that it faces, whether those risks are due to increased competition or severe weather. These principles of materiality form the bedrock of our disclosure framework."

On the other hand, another commissioner, Kathleen Casey, opposed the interpretative guidance and said (according to The Wall Street Journal, Jan. 28, 2010),

"I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise."

The bottom line is that this guidance by the SEC is yet another matter to be taken into consideration when publicly-traded firms prepare disclosure documents. The firms will obviously need experts to help them navigate these waters.

RES Americas: Leading Renewable Energy Firm Based in Denver Metropolitan Area

RES Americas, one of the nation's leading fully-integrated renewable energy companies, is headquartered in Broomfield, Colorado, about 40 kilometers (25 miles) from the University of Denver campus.

The firm, which develops, constructs, owns, and operates projects throughout the U.S., Canada, Mexico, and the Caribbean, moved its headquarters from Austin, Texas, to the Denver metropolitan area about two years ago. When the firm moved, Craig Mataczynski, president of RES Americas, said, "Colorado has demonstrated immense leadership in the development of renewable resources and alternative energy. We are proud to now join that effort," the Denver Post reported at the time ("Energy Company 'Blows' Into Colorado," March 27, 2008).

Several days ago, Cindy Jennings, a Masters in Resource Law Studies 2009 graduate and vice president of brand strategy at Cohn Marketing in Denver, introduced Ann Vessels, the director of the externship program and me to Raheleh Folkerts, the marketing and communications manager for RES Americas. Prof. Vessels and I were interested to learn more about RES Americas as part of the DU College of Law's on-going effort to position itself as the leading renewable energy-related law school in the U.S.

RES Americas has more than 4,000 megawatts of construction projects, which represents about 14 percent of the operating installed wind capacity in the U.S. and has over 12,500 megawatts in development. "We encompass all the necessary expertise to create renewable energy projects, ranging from wind and solar farms and in the near future biomass and energy storage," Ms. Foklherts said. For a list of RES America's operational wind farms, please click here.

RES Americas is owned by U.K.-based RES Group, which has about 89 wind projects with a capacity of about 5,000 megawatts around the world. In mid January, the company announced the completion of the Armenia Mountain Wind Farm in Pennsylvania. The Armenia project consists of 67 GE 1.5 megawatt wind turbines that will generate 101 megawatts of operating capacity.

The fact that RES America chose the Denver area for its national headquarters is yet another indication of Colorado's growing reputation as the center of the new energy economy.

Sustainable Development, Corporate Governance, and International Law Conference to be Held at DU Feb. 12 and 13

The American Branch of the International Law Association is sponsoring the Midwest International Law Weekend conference "Sustainable Development, Corporate Governance, and International Law" Feb. 12 and 13 at the University of Denver Sturm College of Law. The event is being hosted by the Prof. Ved Nanda Center for International Law and the International and Comparative Law program at DU.

The conference will include panels about:

• International Law and Sustainability
• Sustainable Mining and International Law
• International Issues for Sustainable Energy
• Sprawl and Sustainability
• Corporate Governance

As part of the conference, Daniel B. Magraw, president of the Center for International Environmental Law in Washington, D.C., will give a keynote address.

The conference is free to students. However those seeking continuing legal education credits will be charged $95 and attendees wanting lunch on Saturday will be charged $10. To register for the conference, please click here.

For additional information, contact Keri Grundstein at 303 871 6276.

Posting from Santiago, Chile: Environmental Issues Will be a Priority in Government Headed by President-Elect Sebastian Piñera

Sunday 17 of January, represented an historic date for Chilean history. After 20 years, the coalition currently in the government formed by the Christian Democratic Party, the socialist party, Radical Party, and Democratic Party was defeated by the Coalition for the Change formed by two parties that represent the center right: National Renovation Party, and the Democrat Independent Party.

The defeated coalition governed Chile since 1990. The first president was Patricio Aylwin (1990-1994), elected in the first democratic election since 1973. After that, assumed Eduardo Frei (1994- 2000). The third President was Ricardo Lagos (2000-2006), the first socialist since Salvador Allende’s election. The last president of this coalition is the current president Michelle Bachelet who will conclude her term on March 11.

The Coalition of Parties for the Democracy, official name for the Coalition in the power since 1990, did good governments. The coalition reached economic growth, social peace and maybe the most important legacy is the country’s democratization after 17 years of military government, but after 20 years is normal a weakening on the exercise of the power and a change is needed.

On January 17 the Chile’s people elected Sebastian Piñera as new President. He is one of the richest businessmen of the country, former Senator (1990-1998) and important politician since the first democratic government. He belongs to National Renovation Party, a center right party. His election entails that the center right wins its first democratic election since 1958 but should not mean a big change in the country’s future.

Chile has a clear direction committed with the democracy, social justice and economic development. In his first speeches as elected president Pinera has emphasized his recognition to the good labor done by the Coalition for the Democracy, but at the same time has pointed out the necessity of improving in many fields such as economic growth, poverty eradication, crime and corruption fight, and State’s management.

With respect to environmental issues, the new Government has not announced big changes. In the last days was promulgated the law that creates the Environment Ministry, an important signal that the environmental issues will be a priority topic in the next years. The new government will put special emphasis on topics such as: air and water pollution especially in the big cities, sustainable development, environmental courts, renewable energy incentives through taxation measures, emission reduction and civic participation on environmental issues.

--José Ignacio Henriquez
Santigo, Chile
LLM Graduate, December 2009

The Denver Post Guest Commentary: "Producing Clean Energy and Providing Good Jobs"

I am not the only person who thinks that the state of Colorado and Denver are poised to play a large role in the country's move towards a new energy economy.

Check out this recent guest commentary (click here) in The Denver Post by Mark Chen, director of marketing for Abound Solar in Loveland, Colo., and Phyllis Cuttino, director of the Washington, D.C.-based Pew Environment Group's climate change campaign.

The writers describe the positive environment (in a manner of speaking) in Colorado that is setting the foundation for more green energy development, and conclude with this observation:

Investing in the clean energy economy pays off. We have the chance now to choose policies and incentives that could provide thousands of people across Colorado with good-paying jobs, while at the same time protecting the planet.

There is a great deal happening in Denver and all across Colorado to be sure. Learning about it at the DU Sturm College of Law is a great place to begin.

Dr. Elisabeth Holland, Senior Scientist at NCAR, Speaks To DU Class About the Science of Global Warming

Dr. Elisabeth A. Holland, Senior Scientist at the National Center for Atmospheric Research (NCAR) that is located about 60 kilometers from Denver, gave a presentation recently on the science of global warming to students in Prof. Anita Halvorssen's Global Climate Change Law & Policy course at the University of Denver Sturm College of Law.

Dr. Holland, shown at right in picture along with Prof. Halvorssen, along with former U.S. Vice President Al Gore and the other lead authors of the Intergovernmental Panel on Climate Change (IPCC), were awarded the Nobel Peace Prize in October 2007.

Dr. Holland spoke of the many changes that signal a warming world including rising atmospheric temperatures, rising sea levels, and a reduction in the Northern Hemisphere's snow cover. The IPCC's conclusion was that warming is unequivocal. She went on to say that precipitation over land is changing significantly over broad areas with extreme weather resulting in heavy rainfall over North America. She also said that the Greenland and Antarctic ice sheets are shrinking.

"Most of the observed increase in globally averaged temperatures since the 20th century is 'very likely' [i.e., meaning 90 percent] due to the observed increase in anthropogenic [human-caused] greenhouse gas concentrations," Dr. Holland said.

Finally, she said that in order to achieve the IPCC's recommended 2 percent reduction in global emissions of carbon dioxide, the world would have to reduce the rate of emissions by 3.7 percent per year beginning in 2011, 5.3 percent per year beginning in 2015, or 9 percent per year beginning in 2020.

The next IPCC report will be published in 2012.

--Lucy Daberkow

Assistant Graduate Program Director