Chapter 12 – Reasonable Investors’ Growing Awareness of Climate Risk and Its Impact on U.S. Corporate Disclosure Law

Hana V. Vizcarra


Climate change impacts have become more evident, triggering concern and calls to action among individuals, governments, and the private sector alike. Shareholders increasingly view information about the risk climate change poses to individual companies as critical to their investment decision-making. Their use of this information in turn influences corporate disclosure practices. Due to the quirks of a legal standard in the United States that evolves as investors’ views change, what climate-change-related information companies need to include in their disclosures may shift even without any significant change to existing regulations. Indeed, there is evidence that this transformation has already begun. As this happens, courts will help define the parameters of what climate-change-related information is deemed material . This chapter discusses the trends in investor treatment of climate-related information, how it could impact corporate disclosure requirements, and how courts may view the application of U.S. securities law to climate change information.