On Wednesday the Securities and Exchange Commission issued “guidance” to public companies concerning the issue of global warming. As a bit of background, all public companies are required by the SEC to disclose to investors information which might have a bearing on an investor’s decision to, let’s say, purchase or sell stock in that company.
The SEC states in it’s press release,
“We are not opining on whether the world’s climate is changing, at what pace it might be changing, or due to what causes. Nothing that the Commission does today should be construed as weighing in on those topics,” said SEC Chairman Mary Schapiro. “Today’s guidance will help to ensure that our disclosure rules are consistently applied.”
Having said that, here is one of the things companies are required to do, and, in some cases, disclose to investors:
a company should also evaluate the potential impact of pending legislation and regulation related to this topic.
So, I thought, as a public service, I would take a pass at drafting language for the annual report, for example, of your electric company that trades on the New York Stock Exchange.
“Congress is considering passing Cap and Trade legislation which would require our company to pay a tax to the government to continue producing electricity. We have no idea what the amount of that tax will be, and, we may or may not be able to pass that tax on to our customers. We will be limited in the amount of electricity we can produce, and that limit may or may not be sufficient to meet our customers’ demand. If we need to produce more electricity, we may or may not be able to purchase “credits” from other companies, but, we have no idea what the cost of those credits will be, or whether any credits will be available.
If we cannot meet our customers’ demand either under our own limits, or, through purchasing credits, we may or may not need to implement rolling blackouts, which may or may not result in litigation filed against our company which we may or may not win.
All of the above is subject to change depending upon Congress, which may or may not draft any legislation in the open (see: health care), in which case, we may or may not be able to tell you what may or may not happen in the future.”
I would guess that you all will agree that policing this new requirement will be far more productive for the SEC than, say, discovering the next Bernie Madoff.