According to a recent report, almost 75 percent of public companies who file disclosures with the U.S. Securities and Exchange Commission ignore a 3½-year-old rule requiring them to inform their investors about the risks climate change poses to their business. Among those firms, Amazon and Apple stand out for their lack of any discussion of climate change and potential impacts on their business in their 10-K’s and other required filings required among U.S. law.
Considering the influence these companies have on global supply chains, consumer spending and the business community at large, the dismissal of climate change will surely irk Amazon’s and Apple’s stakeholders who insist these powerful firms lead the way in informing investors how climate will affect their operations and therefore, their bottom lines. Meanwhile, the companies year-after-year continue to ignore the request for emissions data the Carbon Disclosure Project (CDP) sends to hundreds of companies annually.
But will either the world’s most esteemed technology brand or online marketplace really listen?
It is easy to assume arrogance is behind Apple’s and Amazon’s slights when it comes to the disclosure of risks within their SEC filings. Both companies have had their ups and downs over the past year—in particular their stock prices—but both companies are still, overall, wildly successful. When you are on top, it is easy to believe pesky and probable risks from an amorphous idea called climate change couldn't really threaten, or boost, your business. After all, Walmart had a similar attitude until 2005’s Hurricane Katrina hit the Gulf Coast. The devastation combined with the retailer’s public relations nadir pushed Walmart to change some of its ways—and many view the company now as a sustainability leader.
But, part of the problem lies with the SEC. Remember, this is the same agency, long underfunded, understaffed and therefore, overextended, that failed to see anything amiss with firms such as Enron, Tyco, Adelphia and MCI Worldcom a decade ago. The SEC was also asleep in the months leading to the 2008 financial crisis, when large financial firms ended up in a free fall and Bernie Madoff’s scheme added insult to massive injuries before the year was over.
And even the SEC’s guidance is nebulous and confusing. After all, when announcing this new rule in early 2010, the agency issued this press release:
“When assessing potential disclosure obligations, a company should consider whether the impact of certain existing laws and regulations regarding climate change is material. In certain circumstances, a company should also evaluate the potential impact of pending legislation and regulation related to this topic.”
Finally, organizations such as the CDP should engage the likes of Apple and Amazon instead of rattling their cages. One CDP staffer I met at a recent conference recounted Amazon’s nonchalance towards disclosing their emissions. When I asked if anyone at CDP had simply visited Seattle to make the case, the response was, “We don’t have the budget to do that.” Considering CDP’s partner is PwC, such an answer was eye-roll worthy at best. Furthermore, at a recent meeting of sustainability managers tasked with reporting to GRI and CDP, one common complaint was that CDP’s methodology of rankings and analysis was not particularly transparent. Nonprofits that want business to do more may want to conduct themselves as business-like: not as a nonprofit.
Of course, Amazon and Apple should disclose their emissions and other related data to their stakeholders to avoid any future hubris. But those who insist these companies open the books could also become more creative and conciliatory when requesting this information. Everyone would be better off.
[Image credit: Leon Kaye]
This is Leon Kaye’s 900th article on Triple Pundit. Based in Fresno, California, he is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. You can follow Leon and ask him questions on Twitter or Instagram (greengopost). He will relocate to Abu Dhabi, UAE after October 1.
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.