Some people may still debate the reality of climate change. But for a steadily expanding group of institutional investors, the warming of the earth's atmosphere is all too real, and they are starting to ask–and even insist–that companies report on the risk exposures from it.

Among the ranks of these activist shareholder coalitions are powerful voices, including those of the California Public Employees' Retirement System (CalPERS), California State Teachers' Retirement System, treasurers from no fewer than eight states, several state and city controllers and comptrollers, large funds like Calvert Group and Domini Social Investments and the few powerful unions left. In recent months,these investors have approached the Securities and Exchange Commission (SEC) to seek its cooperation in efforts to classify the risks associated with climate change as material financial risks and compel disclosure of risk management associated with global warming. They have also approached members of the S&P 500 to encourage them to adopt guidelines on climate change, sustainability and environmental responsibility–such as those developed by the Global Reporting Initiative, the Carbon DisclosureProject and the recently released Global Framework for Climate Risk Disclosure.

Ultimately, investors expect regulation to be necessary to get cooperation. While a few U.S. companies are voluntarily releasing information about their exposure and potential liability, the overwhelming majority has failed to do so. Without SEC action, the investors argue that companies will not make this kind of reporting a high priority. Investors also suggest that the SEC's own guidelines on Management's Discussion and Analysis already require disclosure on "specific known trends, events or uncertainties that are reasonably likely to have a material effect on a company's financial condition or operating performance." They consider climate change such a trend.

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