We’re About To Find Out Which Companies Are Truly Leading on Climate Change

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After years of conference room discussions and think tank white papers calling for new rules to push companies to detail the risk climate change poses to their business, a new era of climate disclosure is finally upon us.

Over the last year, rules requiring companies to publicly outline their climate vulnerabilities and plans to decarbonize have taken off. The European Union’s, which goes into effect in January, will require companies to disclose material risks that climate change poses to corporate bottom lines as well as how companies’ operations materially impact the environment. The U.S.

The corporate world has been split on this emerging trend. Companies who are already adapting to climate change support it, given that the rules will help the public identify which businesses are doing well and, in doing so, create new benchmarks for companies and industries. But on the other hand, some companies fear these disclosures will uncover negative things about their operations.

Study author Michael Greenstone, a professor of economics at the University of Chicago, boils it down to: “Some firms are making the same things as peers, but they’re doing it in a much dirtier way.” study doesn’t name names, but as disclosure rules take effect we’ll soon be able to put names to numbers. From the outset, that information should help consumers and businesses make climate-friendly choices.

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