http://climateinc.org/2010/02/sec-guidance-a-boost-for-carbon-disclosure/ The Business of Stopping Climate Change Tue, 27 Jul 2010 16:33:20 -0700 http://wordpress.org/?v=2.8.4 hourly 1 http://climateinc.org/2010/02/sec-guidance-a-boost-for-carbon-disclosure/comment-page-1/#comment-169 John Shideler Thu, 11 Feb 2010 01:35:28 +0000 http://climateinc.org/?p=456#comment-169 Jane Wells of CNBC asks "what constitutes material." In the context of an SEC disclosure, a "material" impact is one that would affect decision making on the part of the user of the financial disclosure. The threshold for materiality in this case presumably is lower than what most greenhouse gas program rules allow (± 5%) for voluntary reporting of greenhouse gas emissions at the organization level. Establishing materiality is an inherently subjective exercise, and the threshold can differ from one organization to another. Mid single digits expressed in percentage terms against financial metrics (revenue, invested capital, etc.) would definitely be material in my view. Fractions of a percent would likely not be. The tougher calls come when the numbers fall somewhere between these ranges. Jane Wells of CNBC asks “what constitutes material.” In the context of an SEC disclosure, a “material” impact is one that would affect decision making on the part of the user of the financial disclosure. The threshold for materiality in this case presumably is lower than what most greenhouse gas program rules allow (± 5%) for voluntary reporting of greenhouse gas emissions at the organization level. Establishing materiality is an inherently subjective exercise, and the threshold can differ from one organization to another. Mid single digits expressed in percentage terms against financial metrics (revenue, invested capital, etc.) would definitely be material in my view. Fractions of a percent would likely not be. The tougher calls come when the numbers fall somewhere between these ranges.

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