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July/August 2010
UpDate

Financial Disclosures

Climate change assessment and risk management is becoming an increasingly important topic in the field of environmental assessment. An ASTM task group is developing proposed new standards that cover all aspects of climate change assessment.

The first standard to be approved from this task group is E2718, Guide for Financial Disclosures Attributed to Climate Change. The task group is part of Subcommittee E50.05 on Environmental Risk Management in ASTM International Committee E50 on Environmental Assessment, Risk Management and Corrective Action.

“E2718 will be useful for both public and private entities that are developing financial reports,” says Gayle Koch, a member of the E50.05 task group that developed the standard. According to Koch, E2718 provides a process for:

  • Identifying potential financial risks/opportunities associated with climate change;
  • Quantifying the financial impact of those risks; and
  • Determining the appropriate content of disclosure for material risks.

“Currently, there are no other standards that provide this level of guidance,” says Koch, who consults on environmental, product liability and insurance cost estimation and allocation matters. “Given that shareholders are requesting climate change-related information from companies, there is a reasonable likelihood that these impacts are material and therefore should be disclosed. E2718 provides guidance for moving through that process.”

Koch notes that E2718 is consistent with E2173, Guide for Disclosure of Environmental Liabilities. The task group will also work toward developing climate change assessment and risk management standards that address management, mitigation and adaptation. All interested parties are invited to participate in the development of these proposed new standards.

CONTACT

Technical Information: Gayle Koch, The Brattle Group, Cambridge, Mass.

Phone: 617-864-7900

ASTM Staff: Daniel Smith

Phone: 610-832-9727