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SEC Requires Inclusion Of Climate Change Proposal In Proxy Materials

Grayson_Lynn_COLORBy E. Lynn Grayson


In another sign of the SEC's increased focus on environmental and climate change-related risks, the Commission this week informed PNC Financial Services Group, in a letter, that it must include in its proxy materials a shareholder proposal seeking an assessment of greenhouse gas emissions and climate change risks resulting from its lending portfolio. The SEC disagreed with PNC's position that the climate change proposal could be excluded under the 1934 Securities Exchange Act Rule 14a-8(i)(7) which permits the exclusion of proposals dealing with ordinary business operations.

It is important to note that the SEC's Attorney-Advisor Angie Kim specifically stated in its response to PNC that "… we note that the proposal focuses on the significant policy issue of climate change." (emphasis added)

The SEC's decision about PNC's proxy materials suggests that the Commission may be trending towards a greater reliance and support of its 2010 guidance titled Commission Guidance Regarding Disclosure Related to Climate Change. This guidance provided public companies additional insight into existing disclosure requirements as they apply to climate change. The requirement for disclosing climate change risks is the same as those for other risks – whether or not the risk poses a material liability to the company.

More information about this determination is available at