The impact of disclosure is real (and quantifiable sometimes)

Alex Edmans provides these startling statistics in this note that is pulled from this paper by Lavender Yang, Nicholas Z. Muller & Pierre Jinghong Liang:

When large power plants were required to disclose their carbon dioxide output, emissions fell by 7%. But small plants, exempt from disclosure, increased emissions by at 25-56%. Firms that owned both small and large plants shifted production to small ones.

I think when the SEC adopts disclosure rules, the topic of climate will be elevated in those companies where it’s not being talked about enough in the C-suite – so that climate will start being baked into business strategy and not just a “check-the-box” exercise…