Protecting Against D&O Liability For Climate Change-Related Disclosures

This article originally ran in Risk Management Magazine (February 2011).

As the number of climate change-related lawsuits against public companies grows, and climate change issues become the subject of increasing state, federal and international regulatory efforts, the risk that directors and officers may become the targets of governmental and private lawsuits based on their companies' climate change-related disclosures is becoming more likely. Perhaps the clearest indication of this emerging risk is the SEC's first-ever issuance of climate change-related financial disclosure guidelines.

These guidelines, issued on February 8, 2010, indicate that the SEC has recognized that climate change-related regulations and liabilities increasingly may trigger potential corporate reporting requirements under a variety of SEC rules and regulations. The guidance to public companies, entitled "Commission Guidance Regarding Disclosure Related to Climate Change" focuses on