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Companies Resist SEC Climate-Disclosure Requests as Rules Stall

Feb. 14, 2022, 9:56 PM

Market regulators Monday gave the first glimpse into the scrutiny they are giving companies about the business risks of climate change—along with pushback the SEC likely will get in return.

The Securities and Exchange Commission released the first, much-anticipated batch of climate-risk exchanges between operating companies and the agency’s division that reviews corporate filings. The SEC has been sending requests for details behind the scenes as the agency struggles to finalize rules that would force companies to disclose information about the amount of energy they buy and how they manage the risk of rising temperatures.

The agency pressed ocean shipping company Matson Inc. and uniform and cleaning supply manufacturer Cintas Corp. about material past and/or future expenditures for climate-related projects as well as whether the companies expected less consumer demand for services that produce significant greenhouse gas emissions, the letters show. The agency also told the companies to detail weather-related damages to their property and operations, as well as the impact of weather on major customers and suppliers.

Both companies pushed back, telling the regulator they already included all material information in their annual 10-Ks. The SEC’s filing reviewers doubled down, asking the companies to justify these claims.

Matson, which ships freight into Pacific Ocean ports, said it had not made any capital expenditures solely for climate-related reasons.

“Matson’s investments in projects involve complex business decisions and often are supported by multiple rationale, which may include environmental benefits,” the company wrote, adding that it spent more than $1 billion to build four vessels to replace steamships at the end of their life. The new ships include features designed to help reduce greenhouse gas emissions.

The company also told the SEC climate-related risks were not material to its business. The SEC asked for numbers to back up these claims.

The company said it estimated the total cost of damage to its vessels, equipment, and terminals as a result of heavy weather as less than $200,000, or 0.01% of the company’s annual consolidated operating costs. The costs are “de minimis relative to the Company’s financial condition and results of operations,” Matson said.

The agency’s questions were similar for Cintas. When the company said it had not identified any material capital expenditures related to lowering its energy use and greenhouse gas emissions, the SEC asked for details to support that conclusion.

Cintas said it has identified risks associated with its fleet and laundry operations, such as the need to replace trucks in the future and the availability of water and electricity to fuel its laundry services.

The company has not yet identified alternative fuel vehicles it could use to replace its existing fleet, nor is it aware of “any existing laws or regulations that would materially increase the costs of operating its laundry facilities, and was not and is not aware of any alternatives or technological changes to its current operating procedures that could result in material transition effects on its laundry operations,” the company said.

Satisfied with the companies’ responses, the SEC concluded its reviews of both companies Jan. 14. The agency typically makes correspondence public approximately 20 business days after finishing a review.

Late last year, the SEC published letters it sent to subsidiaries of Morgan Stanley, Verizon Communications Inc., Ford Motor Co., Nissan Motor Co. Ltd., and Toyota Motor Corp. to report any risks they faced from climate change in 2021 or better describe them. Some of those letters came before the SEC released a sample letter in September outlining the types of more detailed requests it would ask of companies about climate change in their annual reports.

To contact the reporter on this story: Nicola M. White in Washington at

To contact the editors responsible for this story: Jeff Harrington at; Butch Maier at