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The Morning Risk Report: SEC Asks Dozens of Companies for More Climate Disclosures
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The requests from Securities and Exchange Commission in recent letters focus on company impacts from climate change that would be important to a reasonable investor.
PHOTO: SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Good morning. The Securities and Exchange Commission has sent letters to dozens of public companies asking them to provide more information to investors about how climate change might affect their financial earnings or business operations.
The agency published Wednesday a list of requests that SEC staff have been sending to chief financial officers in connection to a 2010 guidance document on climate-change disclosures. The requests focus on the material impacts on companies from pending or existing climate-change laws, from floods or other physical effects of climate change and from indirect consequences of regulations or business trends stemming from climate change.
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The requests are presented in the form of comments on companies’ periodic filings with the SEC, such as quarterly and annual reports. The SEC hasn’t revealed which companies have received the letters, but a person familiar with the matter said they had been sent to firms in industries including agriculture, oil and gas, banking, real estate and trucking.
Like other top officials tapped by President Biden, SEC Chairman Gary Gensler has made the fight against climate change a priority for his agency. The SEC’s main lever, which Democrats have said it should use more aggressively, is its authority to mandate disclosures by public companies.
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From Risk & Compliance Journal
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The governance benchmark from the International Organization for Standardization represents the outcome of a consensus-driven process involving more than 70 countries.
PHOTO: RAFAEL HENRIQUE/ZUMA PRESS
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An international standards setter has thrown its weight behind a push for companies to go beyond the traditional ideas of good governance to include more environmentally and socially conscious models.
The International Organization for Standardization, a nongovernmental group that has laid out common requirements for everything from how food is harvested to what symbols should be on a car’s dashboard, last week released its first framework for good governance, or the system by which companies are directed and controlled.
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Wednesday’s letters from Massachusetts Sen. Elizabeth Warren and other members of the Senate Banking Committee to SPAC creators scrutinized whether they profit at the expense of individual investors and other stakeholders.
PHOTO: TOM WILLIAMS/ZUMA PRESS
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Elizabeth Warren and three other Democratic senators sent open letters to several creators of special-purpose acquisition companies Wednesday questioning how SPAC executives are compensated and requesting more details about their potential conflicts of interest.
The letters are the latest sign that regulators and lawmakers are increasing their scrutiny of so-called blank-check companies, which were rarely used as a way for startups to go public before 2020 but have exploded in popularity recently. Some skeptics argue that SPACs disproportionately benefit insiders through lucrative incentives even if companies they take public struggle and stick individual investors with losses.
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Credit data generated by Ant Group Co.’s popular consumer lending service will be fully integrated into a government credit-reporting system, a significant step in a continuing effort to bring the financial-technology giant into line with Chinese regulators’ priorities.
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United Airlines said in August that it would require all U.S. employees to be vaccinated against Covid-19 or face termination.
PHOTO: JEFF CHIU/ASSOCIATED PRESS
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A group of six United Airlines Holdings Inc. employees sued the airline over its Covid-19 vaccine mandate, alleging that the airline hasn’t made reasonable accommodations for those seeking religious and medical exemptions.
The suit, filed Tuesday in federal court in the Northern District of Texas, alleges that the company is discriminating against employees who have a religious objection to receiving the vaccine, or who qualify for accommodations on medical grounds. The employees allege that United has made it difficult for employees to seek such accommodations and effectively terminates those who secure them.
The employees’ legal challenge shows the difficult decisions companies face as they develop and enforce new policies around Covid-19 vaccinations.
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Fed Chair Jerome Powell says a gradual tapering process ‘is likely to be appropriate’ at his news conference Wednesday,
PHOTO: JOSE LUIS MAGANA/ASSOCIATED PRESS
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The Federal Reserve signaled it could start reversing its pandemic stimulus programs in November and could raise interest rates next year. The Fed’s rate-setting committee revised its postmeeting statement Wednesday to say that it could start to reduce, or taper, its $120 billion in monthly asset purchases as soon as its next scheduled meeting, Nov. 2-3.
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Western investors have relied on China as a source of returns and diversification for a generation.
PHOTO: NOEL CELIS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Some big U.S. investors are looking past the potential failure of a massive Chinese property developer whose debt woes shook global markets this week, giving a vote of confidence to China as an investment destination despite the rising regulatory and political risks foreign investors increasingly face there.
Chinese authorities are asking local governments to prepare for the potential downfall of China Evergrande Group, according to officials familiar with the discussions, signaling a reluctance to bail out the debt-saddled property developer while bracing for any economic and social fallout from the company’s travails.
China Evergrande's troubles prompted investors to take stock of their exposure to China. Economic growth once looked unstoppable in China, but now faces a range of challenges, including lofty levels of corporate debt and a regulatory clampdown that has clipped the wings of some of its most prominent private business tycoons.
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Certain foreign businesses will be banned from U.S. exchanges such as the New York Stock Exchange under a new law that the Public Company Accounting Oversight Board on Wednesday sought to help implement by adopting a new rule.
PHOTO: RICHARD DREW/ASSOCIATED PRESS
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The Public Company Accounting Oversight Board on Wednesday adopted a new framework that would help it implement a law banning foreign companies from U.S. exchanges if their auditors haven’t been inspected by American regulators.
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The Financial Accounting Standards Board on Wednesday proposed a rule that would require companies to disclose key terms and the size of their supply-chain financing, a move aimed at helping investors better understand the short-term borrowing mechanism.
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For some shippers, ocean freight is more expensive than the products they are shipping. Here, shipping containers at the Port of Oakland in California.
PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
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Pandemic-driven strains in supply chains are triggering changes in contract terms between suppliers and their manufacturing and retail customers as companies try to address the risks and added costs brought on by persistent delays and disruptions.
Procurement experts say that when drafting new contracts and renewing existing ones, companies increasingly are seeking to add provisions that cover the impact of pandemics or epidemics and accelerating inflation. The moves come as commodity costs and shipping prices have soared far faster during the past two years than considered in traditional contract terms.
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Robotic process automation, or software bots, became a critical tool last year during Covid-19 lockdowns. Many companies turned to bots to handle tasks like processing payroll data or expense reports and fielding call-center queries. They also tapped more advanced bots to double check complex legal documents and contracts for irregularities at much higher speeds than remote workers.
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