Should Firms Be Required to Make More Extensive Disclosures About Climate Risk?

Condon and Haeberle

Professors Madison Condon of Boston University and Kevin Haeberle of William and Mary Law School discussed climate change, financial markets and corporate disclosure in a May 25. 2021 webinar sponsored by the Coleman P. Burke Center for Environmental Law. The webinar is available for on-demand viewing and for online CLE credit.

Condon discussed her paper, "Market Myopia’s Climate Bubble," which argues that “the current disclosure regime or information regime is failing to accurately assess, disclose, and respond to the risks and costs of climate change.” She argued that market actors both lack the necessary information and incentives to properly assess climate risk and that the systematic underpricing of climate risk exacerbates the threats posed by global climate change.

Haeberle expressed skepticism about the need to mandate greater climate risk disclosure, above and beyond existing financial disclosure requirements, and questioned whether such requirements would provide investors with more useful information than they already obtain. The risks posed by climate change, Haeberle noted, are not necessarily all that different from other broad, systemic risks that firms and investors must consider. The extent to which such risks should be subject to mandatory disclosure, he suggested, depends on how we view the nature and function of financial markets.

This was followed by discussion and audience Q & A. Both Condon and Haeberle responded to questions ranging from the effect of state level disclosure requirements to whether the lack of international aspect to corporate disclosure will negatively impact the world. 

The program was moderated by Center Director Jonathan Adler, and was just one of a series of programs sponsored by the Burke Center intended to showcase different views and perspectives on environmental law. Additional programs will be highlighted on the Center’s website.