James McRitchie comments on recent trends in climate change disclosures, citing this piece of creative writing from Molson Coors' latest 10-Q:
While warmer weather has historically been associated with increased sales of beer, changing weather patterns could result in decreased agricultural productivity in certain regions which may limit availability or increase the cost of key agricultural commodities, such as hops, barley and other cereal grains … Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. Climate change may also cause water scarcity…
If you were a Molson Coors investor, would you feel better informed after reading that?
We discussed climate change disclosure here at PB.com a while back when the SEC announced a new initiative in this area. We recommend going over and reading that whole post. For those that want to stay here, however, suffice it to say that I see the Molson Coors 10-Q as confirmation that SEC Commissioner Troy Paredes was right when he opined that:
There is a notable risk that the interpretive release will encourage disclosures that are unlikely to improve investor decision making and may actually distract investors from focusing on more important information. Here, it is worth recalling that, in rejecting the view that a fact is "material" if an investor "might" find it important, Justice Marshall, writing for the Supreme Court in TSC Industries, warned that "management's fear of exposing itself to substantial liability may cause it simply to bury the shareholders in an avalanche of trivial information — a result that is hardly conducive to informed decisionmaking."
I also take it as confirmation that I was right when I opined that:
Investors don't get much of value from disclosures as they were being made before this announcement and the most likely scenario is that the disclosures will become less rather than more valuable.
