Press Release
Press Release
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Thomas
02.03.10
Washington, DC — By adding climate change to the list of business impacts publicly-traded companies must disclose to investors, the U.S. Securities and Exchange Commission (SEC) is opening a door to unprecedented scrutiny of companies' environmental accounting practices and contingency plans for continued global warming, according to Peter M. Gillon, head of Pillsbury's Insurance Recovery & Advisory practice.
Gillon explains that the SEC's action will lead to greater scrutiny of the way companies disclose the future effects of everything from droughts and rising sea levels to possible "cap and trade" legislation, potentially leading to more quantitative risk assessment and disclosure, instead of broad generalities. This in turn leads to greater vulnerability of disclosing companies to challenges by activist shareholders and the SEC.
"Documenting the effects of evolving climate conditions or pending legislation is challenging, but the SEC now expects executives to zero-in on where these effects could materially change their bottom lines," says Gillon, who has advised on environmental disclosure matters extensively and co-founded the Association of Climate Change Officers (ACCO).
"Compounding the challenge is the fact many director and officer insurance policies — which executives rely on in disclosure-related securities litigation — specifically exclude coverage for claims arising from ‘pollution,' a term that could potentially include greenhouse gases," he added. "We are advising our clients to look carefully at their D&O policies to make sure there is coverage for shareholder and SEC claims arising from climate disclosure issues."
Pillsbury's insurance recovery practice is one of the first in the United States, dating back to the Great San Francisco Earthquake of 1906, when the firm helped California businesses work with their insurers in order to rebuild. From the enormous business interruption losses arising from the terrorist attacks on September 11, 2001, to some of the largest environmental cleanup cases in the country, Pillsbury's insurance recovery and advisory attorneys achieve outstanding results for clients in claims, litigation, insolvency, and regulatory matters.
For over half a century, Pillsbury has represented national and international clients in environmental matters, building and refining a practice with a deep understanding of evolving international, federal and state environmental policy and regulation. With extensive experience in litigation and enforcement; business and real estate transactions; legal and regulatory compliance; development and finance; environmental impact analysis and environmental management systems, Pillsbury has a strong environmental reputation in matters involving pollution control, hazardous waste management, Superfund, toxic tort, and endangered species issues.
About Pillsbury
Pillsbury Winthrop Shaw Pittman LLP is a full-service law firm with market-leading strengths serving the energy, financial services, real estate and technology sectors, and increasingly healthcare and education. Based in the world's major financial and technology centers, Pillsbury counsels clients on global corporate, regulatory and litigation matters. We work in multidisciplinary teams that allow us to anticipate trends and bring a 360-degree perspective to complex business and legal issues—helping clients to take greater advantage of new opportunities and better mitigate risk. This collaborative work style helps produce the results our clients seek.