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The CAQ reported on its analysis of 29 companies’ Form 10-K comment letter correspondence with the SEC between July 1 and December 31, 2022, regarding their climate-related disclosure. Among the key takeaways:

• There was a lack of uniformity in how companies defined climate-related capital expenses. Most of the 40% of companies that quantified their climate-related capital expenses disclosed such expenses as 1% or less of total capital expenses.
• Costs for climate-related physical risks related primarily to property damage caused by severe weather. Many companies indicated that weather-related impacts had not resulted in any material change in the cost or availability of insurance.
• Climate-related compliance costs focused on costs to comply with national and local environmental laws and regulations. Most of the 40% of companies that quantified their climate-related compliance costs disclosed such costs as between 0.05% and 2% of financial statement items such as operating expenses, SG&A, cost of sales, total costs, net sales, or capital expenses.
• The minority of companies that disclosed having purchased carbon credits or offsets reported doing so for regulatory reasons or as part of achieving their carbon emissions initiatives.

See our recent report: “SEC Comment Letter Trends & Examples.”
           
                        This post first appeared in the weekly Society Alert!