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The Morning Risk Report: SEC Weighs Making Companies Liable for Climate Disclosures
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The Securities and Exchange Commission is looking at whether climate-related disclosures should be filed in companies’ annual reports.
PHOTO: ARIEL ZAMBELICH/THE WALL STREET JOURNAL
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Good morning. Public companies could be required to disclose climate-change related risks to investors in regulatory filings under a proposal being formulated by the Securities and Exchange Commission, a step that could expose them to new litigation threats.
SEC Chairman Gary Gensler said Wednesday he has asked agency staff to consider whether climate-related disclosures should be filed in companies’ annual reports, known as Form 10-K, along with financial data and other information considered crucial to investors. That would require them to provide statements that are both complete and accurate, making it easier for SEC enforcement attorneys to investigate firms or their directors for fraud or disclosure failures.
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While some companies currently provide some information on climate risks, Mr. Gensler said in a speech that those disclosures can be inconsistent and difficult to compare. He likened standardized disclosures to Olympic races.
“It’s not like some sprinters run a 100-meter dash and others run 90 meters,” he said in a speech to Principles for Responsible Investment. “Investors today are asking for that ability to compare companies with each other. Generally, I believe it’s with mandatory disclosures that investors can benefit from that consistency and comparability.”
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Risk Advisory Group COSO Issues Guidance on Cloud Computing
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An advisory group has released recommendations on how organizations should manage risks associated with cloud computing, an increasingly mandatory tool during the pandemic as large numbers of people began to work remotely.
The Committee of Sponsoring Organizations of the Treadway Commission, or COSO, on Wednesday released its guidance on cloud computing. The recommendations are meant to give companies a roadmap for developing a cloud governance program that aligns with COSO’s well-known principles on enterprise risk management.
Over the past two years, COSO has been shifting toward providing organizations with more practical, and less conceptual, advice on how to manage emerging risks. It will be issuing detailed recommendations on other pressing topics, like artificial intelligence and outside contractors, later this year.
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The Syrian opposition militia Ahrar al-Sharqiya, pictured in 2017, were also targeted by U.S. Treasury sanctions.
PHOTO: KHALIL ASHAWI/REUTERS
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The U.S. Treasury Department levied sanctions against five senior Syrian security officials and eight prisons accused of committing human-rights abuses, the start of what the Biden administration says will be its campaign to hold the Assad regime accountable for war crimes.
Wednesday’s action targets intelligence officials the U.S. says are involved in the kidnapping, killing and torture of Syrians opposed to the regime in a decadelong civil war that has claimed hundreds of thousands of lives.
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Credit Suisse Group AG said top employees failed to act on numerous warning signals before it lost billions from family office Archegos Capital Management in March. A report released Thursday prepared by a law firm for Credit Suisse detailed how employees failed to adequately address the risk of Archegos’s positions as trades repeatedly breached internal loss limits. By March, the trades had swelled to $21 billion in gross exposure.
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China’s government is planning to introduce new laws in Hong Kong and Macau that could bar foreign entities and individuals in the cities from complying with sanctions against China, according to people familiar with the discussions.
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Remington Arms Co. has offered to pay nearly $33 million to settle claims that its marketing practices were in part responsible for the Sandy Hook school massacre that left 20 first-graders and six faculty dead, according to court documents.
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A Chinese court sentenced an outspoken farming magnate to 18 years in jail for allegedly causing public disorder and a multitude of other offenses, dishing out heavy penalties in a case seen as a bellwether of the growing political risks that confront private businesses in China.
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Lina Khan, a longtime critic of large tech companies, became FTC head on June 15.
PHOTO: GRAEME JENNINGS/PRESS POOL
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Federal Trade Commission Chairwoman Lina Khan took aim at big technology companies in her first appearance before Congress as the agency’s head, saying online digital platforms are partly to blame for a surge in fraud reported by Americans during the pandemic.
“Fraud has continued to surge,” Ms. Khan said Wednesday before the House Energy and Commerce Committee. “One reason is that fraud today is supercharged by digital platforms where this conduct is tolerated and even promoted.”
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Activision Blizzard Inc. said it had hired a law firm to investigate complaints of sexual harassment and gender-pay discrimination in the workplace, hours before a planned employee walkout over the company’s reaction to allegations made in a recent lawsuit.
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Img caption/IMG CREDIT HERE
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President Biden on Wednesday issued a new directive instructing federal agencies to develop voluntary cybersecurity goals for companies that operate U.S. critical infrastructure, a move that came as senior officials said the administration was exploring the possibility of pursuing mandatory standards.
The effort is the latest by the Biden administration attempting to shore up the nation’s defenses against disruptive cyberattacks, an area the president and his senior aides repeatedly have said is a top national security threat especially after several recent high-profile ransomware attacks disrupted cornerstones of American life and business.
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Rollins said it is conducting an internal investigation of allegations about its accounting practices after disclosing an SEC probe last year.
PHOTO: ANDREW KELLY/REUTERS
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Rollins Inc. Wednesday said it has named an interim finance chief amid a continuing investigation by the U.S. Securities and Exchange Commission into the pest-control company’s accounting practices.
The Atlanta company, which disclosed the SEC probe last year, said it recently became aware of allegations by a former senior member of its accounting department that adjustments in its reserve and accrual accounts were influenced by the company’s performance as measured against internal targets.
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American Petroleum Institute Chief Executive Mike Sommers, right, and North America's Building Trades Unions President Sean McGarvey celebrated the opening of API's new headquarters in 2019 in Washington.
PHOTO: PAUL MORIGI/AP IMAGES FOR AMERICAN PETROLEUM INSTITUTE
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The American Petroleum Institute, Washington’s biggest lobby for the oil-and-gas industry, spent decades leveraging its financial muscle to fight almost every green initiative in its path. Then, the group signaled an about-face.
Even by the standards of Washington, it was a remarkable shift. And it made nobody happy.
Within API, the pressure has fanned divisions nearly as old as the oil industry itself. The giants including Royal Dutch Shell PLC, BP PLC and Exxon Mobil Corp. have demanded API do more to pivot from carbon-intensive fuels and embrace regulation. Many of API’s smaller members—independents and refiners—see those calls as threats to their business and an attempt by larger members to consolidate market power.
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The U.K. allowed nightclubs to reopen this month as the country relaxed its Covid-19 restrictions.
PHOTO: JOEL GOODMAN/LONDON NEWS PICTURES/ZUMA PRESS
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Western economies are learning to live with Covid-19. As each successive wave of the coronavirus has washed over the West, the virus has wreaked less economic damage than the last time around.
In the U.S., Google joined a number of public and private enterprises taking new precautions as the highly infectious Delta variant of Covid-19 sweeps the country, saying it will require all of its employees coming to campus to be vaccinated.
President Biden is expected to announce Thursday that his administration will require federal employees to get vaccinated or be regularly tested for Covid-19, according to a person familiar with the discussions.
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