From Bloomberg News:
The proposed language would require companies to disclose to the Securities and Exchange Commission any analyses they use to measure the resilience of their business strategies to climate risks....
Scenario analyses are “dress rehearsals” that companies use to test how potential, hypothetical future scenarios could affect their business.
But the provision would put companies in the position of having to share highly speculative forecasts that may end up being disconnected from reality, according to Cynthia Mabry, a partner at Akin Gump Strauss Hauer & Feld LLP.
“If you had a crystal ball, what would the world look like—how is that helpful to investors?” Mabry asked. “I really struggle with this one. On a Tuesday you could be thinking you see a market opportunity and it’s great, and on Wednesday the war on Ukraine breaks out and you’re not going to do business in Poland.”
If this absurd requirement stays in the rules, one important question will be whether the safe harbor in the 1995 PSLRA cover these scenario analyses.
