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50–362 2010

S. HRG. 110–952 

CLIMATE DISCLOSURE: MEASURING FINANCIAL 

RISKS AND OPPORTUNITIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

SECURITIES AND INSURANCE AND INVESTMENT 

OF THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

ON 

EXAMINING THE TYPES OF ECONOMIC RISKS AND OPPORTUNITIES 

POSED AND THE CONNECTION BETWEEN CLIMATE CHANGE AND THE 

HEALTH OF FINANCIAL MARKETS; RISKS AND OPPORTUNITIES DISCUSSED IN CORPORATE FINANCIAL DISCLOSURE STATEMENTS AND 

WHETHER REQUIREMENTS ARE ADEQUATE; AND LISTEN TO INVESTORS AND OTHER STAKEHOLDERS ON THEIR REQUEST FOR CONSISTENT CLIMATE RISK DISCLOSURE IN ORDER TO BETTER MANAGE 

FINANCIAL RISKS 

WEDNESDAY, OCTOBER 31, 2007 

Printed for the use of the Committee on Banking, Housing, and Urban Affairs 

( 

Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html 


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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

CHRISTOPHER J. DODD, Connecticut, Chairman 

TIM JOHNSON, South Dakota 

JACK REED, Rhode Island 

CHARLES E. SCHUMER, New York 

EVAN BAYH, Indiana 

THOMAS R. CARPER, Delaware 

ROBERT MENENDEZ, New Jersey 

DANIEL K. AKAKA, Hawaii 

SHERROD BROWN, Ohio 

ROBERT P. CASEY, Pennsylvania 

JON TESTER, Montana 

RICHARD C. SHELBY, Alabama 

ROBERT F. BENNETT, Utah 

WAYNE ALLARD, Colorado 

MICHAEL B. ENZI, Wyoming 

CHUCK HAGEL, Nebraska 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

JOHN E. SUNUNU, New Hampshire 

ELIZABETH DOLE, North Carolina 

MEL MARTINEZ, Florida 

SHAWN MAHER, Staff Director 

WILLIAM D. DUHNKE, Republican Staff Director and Counsel 

JOSEPH R. KOLINSKI, Chief Clerk and Computer Systems Administrator 

JIM CROWELL, Editor 

SUBCOMMITTEE ON SECURITIES AND INSURANCE AND INVESTMENT

JACK REED, Rhode Island, Chairman 

WAYNE ALLARD, Colorado, Ranking Member 

ROBERT MENENDEZ, New Jersey 

TIM JOHNSON, South Dakota 

CHARLES E. SCHUMER, New York 

EVAN BAYH, Indiana 

ROBERT P. CASEY, Pennsylvania 

DANIEL K. AKAKA, Hawaii 

JON TESTER, Montana 

MICHAEL B. ENZI, Wyoming 

JOHN E. SUNUNU, New Hampshire 

ROBERT F. BENNETT, Utah 

CHUCK HAGEL, Nebraska 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

DIDEM NISANCI, Staff Director 

TEWANA WILKERSON, Republican Staff Director 


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C O N T E N T S 

WEDNESDAY, OCTOBER 31, 2007 

Page 

Opening statement of Chairman Reed ................................................................... 1 

Opening statements, comments, or prepared statements of: 

Senator Casey ................................................................................................... 3 

Senator Menendez 

Prepared statement ................................................................................... 27 

WITNESSES 

Dr. Gary Yohe, Professor of Economics, Wesleyan University ............................ 5 

Prepared statement .......................................................................................... 29 

Jeffrey Smith, Partner in Charge of Environmental Practice, Cravath, 

Swaine, and Moore ............................................................................................... 7 

Prepared statement .......................................................................................... 45 

Mindy Lubber, President, Ceres ............................................................................. 9 

Prepared statement .......................................................................................... 80 

Russell Read, Chief Investment Officer, CalPERS ............................................... 12 

Prepared statement .......................................................................................... 95 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

‘‘Carbon Disclosure Project—Report 2007—USA S&P500: On behalf of 315 

investors with assets of $41 trillion’’ .................................................................. 109 


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CLIMATE DISCLOSURE: MEASURING 

FINANCIAL RISKS AND OPPORTUNITIES 

WEDNESDAY, OCTOBER 31, 2007 

U.S. SENATE, COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, SUBCOMMITTEE ON SECURITIES, INSURANCE, AND

INVESTMENT, Washington, DC. 

The subcommittee met at 2:32 p.m., in room SD–538, Dirksen 

Senate Office Building, Hon. Jack Reed, Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF CHAIRMAN JACK REED 

Chairman REED. Good afternoon. Let me welcome all of our witnesses, thank you very much, and begin the hearing. 

This is a topic that is increasingly more relevant and important 

to all of us, and it is a topic of great concern. Today we are dealing 

with the issue of Climate Disclosure: Measuring Financial Risk and 

Opportunities. 

The purpose of today’s hearing is to look at the types of economic 

risks and opportunities posed by climate change and the connection 

between climate change and the health of financial markets, also 

to examine how climate risk and opportunities are currently being 

discussed in corporate financial disclosure statements and to determine whether or not current disclosure requirements are adequate, 

and also to explore the possibility for improvements and hear from 

investors and other stakeholders on their requests for consistent 

climate risk disclosure in order to better manage financial risk. 

Global warming presents a real and serious risk to our environment, our communities, and our financial markets. While no one 

can predict the consequences of climate change with certainty we 

do know enough to understand that there are risks. These risks include crop damage from more severe droughts, damage to coastal 

communities from sea level increases, more intense storms, blackouts that may result from heat waves, and many, many other potential risks. 

I believe it is in our self-interest to manage the risk and find 

ways to mitigate global warming while attempting to adapt to the 

upcoming changes and identify business opportunities to reduce 

carbon emissions. 

There is a growing awareness among analysts, investors, businesses, government officials, and other stakeholders that climate 

change not only poses risk but can create new opportunities in the 

financial sector. Major environmental risk and liabilities can sigVerDate Nov 24 2008 04:11 Jan 22, 2010 Jkt 050362 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 E:\HR\OC\A362.XXX A362

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nificantly impact companies’ future earnings and, if undisclosed, 

could impair investors’ ability to make sound investment decisions. 

But at the same time, a corporation or investor can profit from environmental innovation such as the development of new energy-efficient or renewable energy technology. 

The cost associated with more extreme weather events, regulations to curb greenhouse gas emissions at the global, regional, 

state, and local level, growing global demand for low carbon technologies, and the increasing geographic spread of infectious diseases are just a few of the ways that climate change is likely to 

ripple through the U.S. and global economy. With these risks, as 

I mentioned before, however, come some opportunities. Companies 

in many sectors can increase their profitability by implementing 

energy-efficient strategies and developing emission reducing technologies and products whose value is enhanced by global efforts to 

reduce greenhouse gas emissions. 

In September 2007, the Carbon Disclosure Project released its 

fifth survey. The CDP represents 315 institutional investors with 

assets of $41 trillion, or more than one-third of the total global invested assets. Fifty-six percent of S&P 500 companies answered the 

survey. Of those responding, 81 percent of the companies reported 

that they regard climate change as posing a commercial risk, and 

69 percent of those firms also considered it an important business 

opportunity. 

While the majority of the S&P 500 companies participated in the 

survey, the CDP also conducted a review of Form 10K securities filings and found that climate change disclosure was rare. 

There is an old adage in business, ‘‘what gets measured gets 

managed.’’ Investors recognize this and they are calling for greater 

climate disclosure, both voluntary and mandatory. 

In September, a broad coalition of investors, State officials with 

regulatory and fiscal management responsibilities, and environmental groups filed a petition asking the SEC to issue an interpretive release to clarify that publicly traded companies must assess 

and fully disclose their financial risk and opportunities related to 

climate change under existing law. The 22 petitioners include leading institutional investors in the United States and Europe, managing more than $1.5 trillion in assets. 

In addition, the number of shareholder resolutions on climate 

change is increasing from six in 2001 to almost 50 in 2007. These 

resolutions now account for over 10 percent of all shareholder resolutions that are filed. Public disclosure about global warming has 

largely focused on the scientific debate and the environment consequences. As the science has become stronger and the need for action more compelling, global warming is getting increasing attention in corporate boardrooms and from investors and the market is 

responding. However, markets work best when they have accurate 

information, informational transparency is therefore vitally important if financial markets are to price climate risk and opportunities 

efficiently. 

In addition to today’s hearing on climate disclosure I think it is 

also important for the Subcommittee to consider the emerging financial market in emissions and carbon trade. The global effort to 

reduce the emissions of greenhouse gases that has led to the creVerDate Nov 24 2008 04:11 Jan 22, 2010 Jkt 050362 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HR\OC\A362.XXX A362

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ation of large and rapidly growing carbon markets around the 

world is something that has to be reckoned with. According to the 

World Bank, the global carbon market grew from approximately 

$10 billion in 2005 to over $30 billion in 2006. Some credible private estimates put the global market at over $50 billion in 2007. 

While it is difficult to predict with precision, the enactment of a 

mandatory cap and trade bill in the United States would create the 

largest carbon market globally. In the EU Emissions Trading 

Scheme, carbon trading occurs both over-the-counter and on exchanges with significant participation by some of the largest regulated financial institutions. It is expected that a U.S. cap and trade 

program would develop similarly. 

Today’s hearing is an opportunity to learn from our witnesses 

about what economics is telling us about climate change, the connection between climate change and the health of financial markets, and the type of information investors need to make sound decisions in the marketplace. It is also an opportunity to examine voluntary and mandatory mechanisms for climate change and climate 

risk disclosure by public corporations, whether current disclosure is 

adequate, and the need for the SEC to offer guidance for climate 

risk disclosure. 

I want to recognize now my colleague, Senator Casey, for his 

opening comments. Senator Casey. 

STATEMENT OF SENATOR ROBERT P. CASEY 

Senator CASEY. Mr. Chairman, thank you very much. 

I want to thank you for calling us together today. I want to 

thank our witnesses for bringing their expertise and experience to 

bear on these questions, and also for the time they took to travel 

here and to present testimony. 

I have just a brief opening statement. First of all, to thank the 

Chairman for bringing this issue to the fore. This is an issue or 

these issues we will discuss today are issues that are not often 

talked about in the same context, often not in the same paragraph 

if not in the same galaxy. People do not think of climate change 

and investment strategy in the same place. But we know that that 

is not the case, that they are closely interrelated. 

Like a lot of Americans, one of the most searing images that I 

remember on the issue of climate change was brought home—a lot 

of them obviously—a motion picture that did it for many Americans. But I remember the picture on the cover of Time Magazine 

in 2005. I cannot remember which week, but with the polar bear 

on the small piece of ice and all around him is water, presumably 

that melted around that ice piece. 

I will never forget one fact in that article, and you did not have 

to be a scientist or a climatologist or any kind of an expert for this 

to come home to you, and it certainly did for me, where they said 

that since about 1970, roughly 35 years, the percent of the Earth’s 

surface which has been the subject of drought had doubled, had 

doubled. Now you do not need much expertise to know that when 

that kind of drought occurs and that kind of landmass has drought 

connected to it, over time that leads to hunger and darkness and 

death for the human race, for the human race that is affected by 

that drought. So this is an urgent priority. 


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At the same time, we all have strong feelings on the question of 

climate change. Most of us in this room, and in most rooms in the 

country, would say we have to make good investments. In the context of investments that pertain to financial investments, whether 

it is pension fund investments or other investments of public dollars—not to mention private investment—you want to do it in a 

way where you get a good return and you do it prudently and you 

do it based upon the best evidence available for that investment. 

So for all those reasons, when I was—in the 2 years I was a 

State Treasurer of Pennsylvania, I thought my obligation was not 

just to do the basic job of being a State Treasurer, but was to think 

beyond the boundaries of normal investment strategy and to think 

of other ways to get a good return on investment in connection 

with an important priority like climate change. 

So what we did in Pennsylvania in two short years, and I think 

it bears repeating, I think, in other parts of government, especially 

at the Federal level, and other States have done many of these 

things as well. I do not claim to be the author of all of these. But 

the first thing we did was we created a Keystone Green Fund, a 

new investment, which we established to attract and leverage private sector investments in clean technology projects. Many of you 

have heard of those kinds of efforts in States. 

No. 2, we had an active equity management initiative where up 

to $50 million in State assets were invested so that we could place 

those assets with investment managers who had a demonstrated 

track record of providing superior returns on their investments in 

clean technologies. 

And then the last two things we did are even more applicable for 

today: environmental equity screens. Our department, at that time, 

developed new investment screens for its managers and outside 

consultants, the firms and individuals you retain to invest public 

dollars in an appropriate way. We wanted to use those screens 

when evaluating a company’s potential exposure to environmental 

liabilities, all part of good, hardheaded financial investment strategy. 

And No. 4, we joined a national organization which many people 

in this room know about, the Investor Network for Climate Risk. 

We formally joined that network, which as some people in the room 

know, is a network of institutional investors and financial institutions that promote better understanding of financial risks and investment opportunities posed by climate change. 

So I think that there are great possibilities for the Federal Government to chart a brand-new course in this area. I know some initiatives are underway. I think Senator Reed calling this hearing is 

one opportunity to explore such strategies, where we can literally 

equate and work on two sides of—two ends of a problem, I should 

say. One is the challenge posed by climate change, challenge to our 

environment, challenge to human life literally. And on the other 

hand, get good returns on those investments, especially in the area 

of clean technology. 

And oh, by the way, we can create jobs, too. So the old false 

choices of picking the environment over jobs or picking good environmental or climate policy as opposed to good investment policy, 


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all those dichotomies I think are shattered in large measure because of what we know now. 

And for all those reasons, Mr. Chairman, I am happy to be here 

and honored that you would bring these experts together. 

Chairman REED. Thank you very much, Senator Casey, for your 

very eloquent words and also your insights as a former treasurer 

who had the responsibility to invest and do it in a conscientious 

way. Thank you very much. 

Let me now introduce our panel. We are very pleased to be joined 

this afternoon by experts in the field. Let me first begin by introducing Dr. Gary Yohe. Dr. Yohe is a Professor of Economics at 

Wesleyan University and the recent Nobel Prize recipient for his 

work on the International Panel on Climate Change. 

I did not see you being interviewed with Al Gore. I guess you 

were out of town. I understand. 

His work has focused attention on both mitigation and adaptation to climate change and tools to try to manage the risk of climate change in an uncertain world. 

We are then joined by Mr. Jeff Smith who is the Director of the 

Environmental Practice Group at Cravath, Swaine, and Moore Law 

Firm. The group also provides day to day counseling on environmental management and corporate governance issues, environmental issues of interest to the SEC, shareholder relations involving environmental matters, and environmental litigation. Mr. 

Smith recently completed a 3-year term as Chairman of the American Bar Association’s Special Committee on Environmental Disclosures. Thank you very much. 

Ms. Mindy Lubber is President of Ceres, a U.S. coalition of investors and environmental organizations working to improve corporate, environmental, social and governance practices and Director of the Investor Network on Climate Risk, an alliance that coordinates U.S. investor responses to the financial risk and opportunities posed by climate change. 

And finally, Mr. Russell Read is the Chief Investment Officer for 

CalPERS, the nation’s largest pension fund that manages $250 billion of retirement funds for 1.5 million California retirees. Mr. 

Read is responsible for the Strategic PLAN for CalPERS Investment Office, including tactical asset allocation, risk management, 

business development and new investment programs. 

Thank you again for joining us. I have had an opportunity to look 

at all the statements. They are excellent, they are detailed, they 

are analytical. I will ask you, though, to contain your verbal comments to about 5 minutes so that we can get through the panel and 

Senator Casey and I will have an opportunity to ask questions. 

Thank you very much. 

Dr. Yohe, would you please begin? 

STATEMENT OF DR. GARY YOHE, PROFESSOR OF ECONOMICS, 

WESLEYAN UNIVERSITY 

Mr. YOHE. Mr. Chairman, Senator Casey, members of the Subcommittee, thank you so much for your invitation to present some 

testimony based on my work as an economist and also as a senior 

member of the Intergovernmental Panel on Climate Change. 


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You asked me to talk a little about how economics can inform national and global responses, a little about what the Stern Review 

contributed to the landscape, a little about what the IPCC has contributed, and then to connect it all to the health of financial markets. It is difficult to do all of that quickly. I did provide, as you 

noted, some remarks and some details, so I will try to hit the highlights. 

My testimony is anchored on a fundamental conclusion that 

emerged from both the IPCC Fourth Assessment Report and the 

Stern Review: economics can play a significant role in understanding how we should respond to the risks of climate change. My 

take is that this role will be productive in policy deliberations only 

if the practitioners accept the shortcomings of cost-benefit analysis 

of the problem and begin to adopt a risk management approach to 

the problem. 

I was pleased to note that both Senators spoke specifically about 

climate risks and a lot less about costs versus benefits in their 

opening remarks. 

Both the Stern Review and the IPCC Fourth Assessment Report 

describe a climate that is changing faster than anticipated just 5 

years ago. Significant impacts are being calibrated in many 

metrics, some are economic, but some are now being expressed in 

terms of human lives at risk, risks to unique and threatened ecosystems, and so on. 

Perhaps more critically, many of the temperature thresholds that 

could trigger critical impacts are thought to be lower than we 

thought just five years ago. This suggests that the associated risks 

are closer in our future than earlier anticipated. 

It is perhaps with respect to the risks about which you are having conversations and deliberations most important to recognize 

that achieving no specific concentration target will guarantee you 

achieving a particular temperature target or temperature threshold 

in terms of increases in global mean temperature. That is to say, 

the best you can talk about in terms of policies that you think 

about on the adaptation side or the mitigation side is reducing or 

mitigating the risks associated with certain thresholds. Guarantees 

are just not going to happen. 

Some of these risks are identified in the tables that I have sent 

to you. Translating them into dollars and cents is an extraordinary 

challenge, and some might say that we have failed to meet that 

challenge. Economists do know that they should be measuring the 

social cost of carbon. More than 200 estimates are now available, 

but they are far from comprehensive in their coverage of potential 

damages. Depending on how heavily the future is discounted heavily and how equity concerns are incorporated in the calculations, 

even negative ‘‘costs’’ are possible. The median estimate for a 3 percent discount rate is about $20 a ton of carbon. That is about $5 

a ton of carbon dioxide. 

The Stern Review, though, reports an estimate of $85 a ton of 

carbon dioxide. 

So what’s the deal? Many of us (I have included some of the testimony that I made about Stern last February) feel that Stern was 

right for the wrong reason. There is an economic reason for immediate action based on identifying a risk that is ‘‘dangerous’’ and recVerDate Nov 24 2008 04:11 Jan 22, 2010 Jkt 050362 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 E:\HR\OC\A362.XXX A362

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ognizing that climate policy is an imperative. As soon as that happens, temperature thresholds can be identified and associated 

probabilistically with concentration targets. Since concentrations 

depend on cumulative emissions, the climate policy problem becomes an exhaustible resource problem for which the least costly 

approach is well established: set an initial scarcity rent immediately and arrange for it to increase at the rate of interest in a 

predictable and persistent way. The policy can be implemented by 

trading permits or setting a carbon tax. I tend to favor a carbon 

tax, but that is entirely a different story. 

It is essential that the Senate and others who worry about climate change for the United States and the globe recognize setting 

policy in 2007 or 2008 that will solve the problem once and for all 

is impossible. Current deliberations need to be informed about the 

long-term risks as you indicated, but you need to work to set near 

term policy in terms of promoting ‘‘carbon friendly’’ investments 

that will be undertaken at the appropriate time (so that they will 

not be particularly expensive) and avoid locking the economy into 

high carbon decisions. 

In short, a significant mitigation is in our future. Ignoring climate policy in economic decisions will be just as unsustainable for 

business in the United States and around the world as ignoring climate risks. 

Thank you very much. 

Chairman REED. Thank you very much, Dr. Yohe. 

Mr. Smith, please. 

STATEMENT OF JEFFREY SMITH, PARTNER IN CHARGE OF 

ENVIRONMENTAL PRACTICE, CRAVATH, SWAINE, AND MOORE 

Mr. SMITH. Chairman Reed, Senator Casey, thank you very 

much. 

In addition to your kind introduction, I should note that I have 

been practicing environmental law for 27 years, principally at the 

intersection of environmental law and business issues, and that I 

have had the opportunity and sometimes the pleasure to review 

thousands of pieces of environmental disclosure. Notwithstanding 

that experience, which I hope to make of use to the Committee, I 

am speaking on my own behalf, not on behalf of the ABA or my 

firm or my clients. 

Investor interest in climate change is at a volume and level of 

sophistication that is unprecedented in my experience. Superfund 

and asbestos, which were both substantial issues, run a distant 

second. 

This has had several significant consequences over the past 5 

years. There has been a dramatic rise in the number of shoulder 

resolutions and in the level of support of those resolutions. There 

has been a development of an unprecedented, sophisticated, robust 

and often third-party verified voluntary disclosure marketplace, 

particularly involving companies in the energy sector with high 

sensitivity to climate change issues. And in these reports, companies often share substantial baseline data and strategic decisions 

and analyses with investors. 

There has also been a coalition of public forces, typically State 

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urers, and private and pension money to drive the shareholder resolution agendas and the disclosure agenda. 

Against this recent backdrop, there are long-standing, broad and 

flexible SEC disclosure regulations that have governed environmental disclosure for over 30 years. They have led, often after guidance from the SEC, to significant and still evolving disclosure 

across all market sectors from a variety of legal technically challenging environmental topics, ranging from Superfund, to the 1990 

Clean Air Act to the cluster rules for pulp and paper in the late 

1990’s, as well as all types of environmental litigation. 

Briefly, the regulatory construct is contained within Reg S–K and 

Reg S–X and includes Item 101, which requires disclosure of material capital expenditures and the cost of compliance with environmental law, including any laws implicating climate change; Item 

103, which requires disclosure of material litigation to which a 

company or its property could be subject; and Item 303, which requires disclosure of material known trends and uncertainties and 

gives investors an opportunity to look at the company and its prospects and its challenges through management’s eyes. 

For financial statement disclosure, the operative principle is embodied in FAS 5, which requires accrual of a contingent loss when 

it is both probable that it has been incurred and the amount is estimable. This provision, which is subject to substantial accounting 

art—and I’m not an accountant—strikes a balance between two 

competing forces. On the one hand, matters should be kept out of 

financial statements until they are more likely than not real and 

a value can be fairly placed on them. There is arguably nothing 

more misleading to the market than ill supported math. 

On the other hand, guidance to FAS 5 makes clear that recognition of a liability cannot be delayed until the event is certain or 

there is only one estimate of a loss. Beyond a point, a company 

should not be able to hide behind uncertainty. Material surprises 

also disrupt markets. 

Woven throughout these regs and overarching all of securities 

law under the 1933 Act and the 1934 Act is the concept of materiality. This is a highly significant filter that separates the important 

from the trivial. This is a flexible standard and case law and litigation emphasize that it is non-numerical. It is nevertheless important to be precise about how to use it in the climate change context. 

The standard is that the event or the loss must be material to 

the company from the perspective of a reasonable investor, not material to society at large or significant to a large number of investors. While no one can seriously dispute the importance of climate 

change as a societal issue, there are nevertheless many companies 

for which it is not now and may never be a material issue. It would 

be a mistake to make everyone say something. 

Similarly, even for companies at the heart of greenhouse gas 

emission issues, certain types of information are not now and may 

never be material. The cost of carbon credits, for example, may 

soon be material to a coal burning utility in Ohio but the physical 

risk to its own plants from the effects of climate change may never 

be. Even companies that should say something should not be compelled to say everything. 


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In the past, the SEC has responded to market demands for information with successful guidance and clarification about how to act. 

For example, after the passage of Superfund between the mid1980’s and early 1990’s, prompted in part by guidance from the 

staff, substantial and increasingly precise amounts of information 

became available to investors about liability for hazardous waste 

contamination. 

On a shorter time fuse, through the workings of a Staff Legal 

Bulletin, the SEC was successful in prompting disclosure about 

public company preparedness to address the millennium bug 

which, like climate change, had potentially far-reaching market 

consequences. 

The way forward consists of some to-dos, in my view, and some 

not-to-dos. The to-dos are very simple. The SEC should clarify in 

a reasoned and considered way the application of time-tested disclosure principles to climate change. The SEC should also keep the 

business effects of climate change on its regular agenda so that, as 

with Superfund, changing circumstances can lead to evolving requirements. 

The not-to-dos include these: do not abandon or substantially expand or to modify time-tested disclosure principles. They work and 

they can and should be made to work in this instance. Do not take 

any action that risks flooding the market with untested data or 

unprovable assumptions. This will undermine investor confidence, 

obscure evolving business truths and burden companies with the 

obligation of gathering and reporting information that would ultimately be of no lasting value. And finally, do not let the voluntary 

disclosure marketplace supplant mandatory disclosure. The voluntary market is robust, energetic and valuable at the moment, 

but it is unfiltered and unordered. The SEC should reassert its role 

as the gatekeeper of material information on climate change for the 

marketplace. 

Thank you, Senator. 

Chairman REED. Thank you very much. 

Ms. Lubber, please. 

STATEMENT OF MINDY LUBBER, PRESIDENT, CERES 

Ms. LUBBER. Thank you, and thank you for having me. 

It is a pleasure to be here, Mr. Chairman. When I was the Regional Administrator of the EPA, you led on many great things in 

New England, and I thank you. 

Mr. Casey, when I founded the Investor Network on Climate 

Risk, it was leaders like yourself who really saw the vision of 

bringing together and marshaling the forces of investors, investors 

like you, like Mr. Read to my left in taking a leading role on the 

financial impacts of climate change on what it takes to address 

that. 

We all know that addressing climate change is a multipart very 

complex situation. Thinking about bringing our carbon footprint 

down by 80 percent by the year 2050 is complex, is not going to 

happen tomorrow, but at the same time mandates and requires 

every ounce of our energy. But we also know it is a step-by-step 

process. It is building one block after another. 


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The block that we are talking about today, I would argue, is very 

doable, can be done in the short term, and will have a marked difference on the overall effort to address climate change and mitigating its impacts and eventually getting to a point where we bring 

that carbon footprint down by the year 2050. 

Today we are talking about the issue of material information of 

companies assessing their climate risk—and I do believe once they 

assess the problem, they act on it—better, and disclosing it, disclosing it in a way that investors understand the risks to a company and the opportunities to a company. 

The solution to that disclosure, to that important information in 

the marketplace, is fairly straightforward. The SEC, whose job it 

is to provide adequate information to the investor community of 

publicly traded companies is obligated to make sure that material 

risk and opportunity is disclosed so people can make adequate decisions. For whatever reason, there is a logjam. 

What we are talking about today is not solving the entire problem of climate change but taking a very important step that could 

be led by leaders such as yourself to help break a logjam, to ask 

the SEC to issue interpretive guidance that their present rules and 

regulations that are in place, nobody is looking for a new statute 

necessarily or a new set of regulations that need to be promulgated. As a former regulator, I know full well that that can be complex, 500 pages, years of deliberations. 

What we are looking for is a memorandum to remind companies 

that they ought to be disclosing material risk of climate change. 

There is a very simple message I am trying to convey to your 

Committee today and it is that investors and capital markets have 

an important role to play in tackling global warming. But marshaling that market power to address this colossal challenge requires investors getting the information they need from companies 

about the risks and the opportunities they face from climate 

change. 

Right now the information companies are providing on climate 

change is just not adequate. It is not at the level investors need, 

in most instances. There are great examples, Johnson Controls, 

Dow, Dupont, who are doing it. It is not impossible, it can be done, 

and it is being done. But not in enough instances and not uniformly. We need to make sure that investors have the informed information they need to make good decisions. 

Action by the Securities and Exchange Commission to rectify the 

situation is manageable, it is doable in the short term, and no 

doubt your leadership can make it happen. 

Before getting into a few specifics, let me provide some brief 

background on why investors managing trillions of dollars in assets 

are concerned about climate change and what they are doing to encourage better climate risk disclosure from U.S. companies as an 

important step. Investors recognize that climate change is real, 

that it poses enormous financial risks and opportunities to each of 

their portfolios. Prolonged heat waves, the kind of horrors we saw 

in New Orleans, those kinds of physical changes are billion-dollar 

implications to our economy. Emerging carbon reducing regulations 

have hundreds of millions of dollars of impact on many companies 

that are regulated. And the growing opportunities for climate 


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friendly technologies and products are just a few of the ways that 

climate change is already rippling across our economy and across 

dozens of business sectors from insurance to agriculture, to electric 

power, tourism, and transportation. 

And opportunity related disclosure, the upside of addressing climate change, is especially important because climate change offers 

significant new business opportunities for investors and companies 

such as investing in and developing clean technologies and renewable energy. 

To evaluate how companies and sectors will be affected by climate change, investors need better information. How will power 

companies building new coal-fired power plants be affected by regional and Federal carbon limits? And how will insurers and agricultural companies be impacted if severe droughts—as we are seeing now in the Southeast and are experiencing—become more common? And which automakers are best positioned to seize the opportunities that will be created by new, tailpipe emission limits and 

tougher fuel efficiency standards? These are material issues, material risks that investors need to know. 

In an effort to get that information, investors have filed dozens 

of shareholder resolutions with companies over the recent years requesting more and more information about their risk exposure and 

their response strategies to climate change. And they have sent disclosure requests to 50 large power companies and 30 large insurance companies and they have joined hundreds of investors worldwide to send voluntary risk disclosure questionnaires. 

These efforts have resulted in some U.S. companies improving 

their disclosure, but they are the exception rather than the rule. 

Despite a groundswell of demand from investors for more information on the business impacts, corporate climate disclosure continues 

to be scant, inconsistent, and not always addressing maternal 

issues. This needs to change. The Securities and Exchange Commission can and should use its existing authority to make this happen. 

In final, 6 weeks ago 18 leading investors, including Russell Read 

to my left representing CalPERS, filed this petition asking the SEC 

to require companies to assess and disclose their financial risks 

from climate change. The petitioners included $1.5 trillion of investors, investors from across the country, California, Florida, New 

Jersey, New York, North Carolina, and Rhode Island. 

Climate risk disclosure, without question, falls squarely into the 

category of material risks that companies should be disclosing in 

their SEC filings. The petition requests, because after being asked 

for 4 years and the SEC has been nonresponsive, the petition more 

formally requests that the Commission formally issue interpretive 

guidance clarifying that material climate related information must 

be included in corporate disclosures under existing law. 

I want to emphasize that the petitioners are not seeking an onerous new disclosure regime. They are just asking that because climate risk varies between sectors and could change because of 

quickly evolving regulatory regimes and new scientific information, 

that we issue general guidance from the SEC as suggested in the 

petition. 


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The bottom line, efficient markets depend on the availability of 

information. The SEC can and needs to do more to ensure that this 

information makes its way into the marketplace to allow for a 

number of things: investors to make good decisions, companies to 

understand their risk, and in my judgment they will act on that 

risk when they look at it, and to further the discourse. I believe 

this will take an important step in addressing the world problem 

we are facing of global warning. 

Thank you. 

Chairman REED. Thank you very much. 

Mr. Read, please. 

STATEMENT OF RUSSELL READ, CHIEF INVESTMENT 

OFFICER, CALPERS 

Mr. READ. Chairman Reed, members of the Committee, thank 

you for inviting me here today. 

I am pleased to speak today on behalf of America’s largest pension system, the California Public Employees Retirement System, 

also known as CalPERS. We provide pension and health benefits 

to 1.5 million public employees, retirees, and their families. We 

have more than $250 billion invested in the market. 

Since investment income typically pays over 75 cents of every 

pension dollar, we rely on sustainable and compelling long-run returns to make sure that the money will be there down the road for 

California’s public employees. Sustainability is the key word here. 

We are in a marathon, not a sprint. This is about sustainable portfolio companies, a sustainable healthy economy needed by these 

companies in order to thrive, and sustainable natural resources. 

Across our diverse investment portfolio, CalPERS has committed 

several billion dollars to those programs, managers, technologies, 

and companies which can offer both compelling investment returns 

as well as substantial long-term improvements in the environment. 

Sustainability is why we are investing specifically in alternative 

energy and conservation ventures, why we are pushing companies 

to fully report carbon emissions that may harm the environment, 

and why we are urging government leaders to create incentives 

and penalties to protect the environment. Without such efforts, we 

risk sawing off the branch that we are sitting on. 

Increasing evidence indicates that climate change presents material risk to numerous sectors of the economy. These risks may be 

operational, market, legal, regulatory, or reputational in nature. 

Some companies are voluntarily including climate risk and sustainability reports or more general corporate responsibility reports. 

However, many companies are not disclosing their climate risk or 

strategies for dealing with these risks at all. This makes it impossible to assess companies’ long-term financial prospects, at least 

with respect to key environmental challenges these companies 

might face. 

From our standpoint, voluntary disclosure is not enough. Those 

who voluntarily disclose often lack the material information needed 

to properly assess their environmental sensitivities. To make matters worse, there is little consistency in format or in detail, making 

it nearly impossible to compare the environmental and carbon footprints of different companies. 


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The information tends to be directed to environmental interest 

groups or the general public but not to investors. Given the significance of climate risk for major companies in a new carbon constrained world, reporting on carbon risk could and should be standardized. It should not be a virtue. It should become an obligation 

and it is quickly becoming a necessity for prudent investment decisionmaking. 

Yet it is not just risk that we are interested in, but equally we 

are interested in the opportunities that are created by better disclosure. For example, CalPERS has committed over $600 million to 

clean technologies and products that reduce emissions, to manufacturing processes that minimize the use of natural resources, and to 

systems that do not contaminate air, water or land. We have also 

earmarked $500 million for managers who screen companies for 

compliance with environment guidelines. And we have set an energy reduction goal of 20 percent over the next 5 years for office, 

retail and industrial and apartment properties totaling tens of billions of dollars in value. 

We are also engaging companies in the airline, auto, utilities and 

oil and gas industries that are under performing compared to industry peers and that lack disclosure. You may ask isn’t this SEC 

petition a case of regulatory overkill? 

Let me close with the results of a survey of 265 global power 

companies that we published with a sister pension fund to show 

why disclosure is so essential. Only 25 of those 265 companies had 

complete information about the energy costs, emissions, reduction 

programs, and targets and emissions trading agreements. So take 

a guess, how many of those 25 companies created overall economic 

value after subtracting for the cost of their carbon footprints? The 

answer is six. Six of the 25 companies added value to the economy. 

What about the other 240 companies for which we have little or 

no information? Investors are working blind with those other companies. This is the kind of information that investors need and are 

not getting but will be material in our evaluation in the future. 

Without your help it is unclear whether the SEC will do the right 

thing here and set the environmental and carbon reporting standards that will prove critical to investors and corporate America 

alike. 

Thank you for your attention to this important issue, and I am 

happy to answer any questions. 

Chairman REED. Thank you very much. 

Thank you all for excellent testimony and also for observing scrupulously the convention of 5 minutes, which we do not so we appreciate at least the witnesses cooperating. 

Dr. Yohe, you mentioned in your testimony that we should essentially move away from cost-benefit analysis and embrace risk management approach. Can you talk about that in terms of a specific 

company? For example, how would that differ from what is being 

done at the moment? 

Mr. YOHE. A specific company might try to envision climate risks 

that it face when it considers its business conditions in a warming 

environment. It might also want to take the regulatory environment that it faces on carbon, its location, and other factors into account. I think that it would, at this point, be nearly impossible to 


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for such a company to simulate the range of costs and benefits (in 

terms of climate change) for any investment that it might be considering. 

Firms could, however, look at a range of possible options and cast 

them in terms of metrics of climate-related risks that maybe are 

not even calibrated in terms of economic measures. They could 

thereby achieve a wider understanding of their carbon footprint, 

and their significance in their profitabilities. This information could 

then be conveyed to their shareholders, to their customers, and to 

the other people who have a vested interest in their material risk. 

Chairman REED. I think part of this is—the challenge really is 

trying to get this in a way that is understandable by the investing 

public. There is some sophisticated investment analysts but there 

is also some one just reading the proxy statement here and there. 

Are you suggesting that it is so complicated that it might not be 

ever reduced to something that could be measured by dollars? 

Mr. YOHE. I am suggesting that this could easily be the case. 

Conceptually, in business boardrooms and in rooms like this where 

decisions are made about climate change and climate policy, measuring climate risk and/or climate change contribution will be very 

difficult for a very long time. 

If you are then thinking about asking firms to subtract the value 

their carbon footprints from their bottom lines to determine the degree to which they contribute to social damages calibrated across 

the planet, then you have a problem. 

How do you cope with estimates of the carbon footprint that 

range from ¥$3 per tonne of carbon up to $100 a tonne? Your, and 

their, calculus would depend on a wide range of numbers. And 

which one do you want to use? Is it the material risk of the customers with which firms are conducting business? Or are would 

you allow firms to look at firms’ (global) social cost of carbon ‘‘footprints’’? 

Depending on what you decide, shareholders will get extraordinarily different answers to their concerns about ‘‘material exposure’’. 

Chairman REED. Ms. Lubber, you have a comment, too? 

Ms. LUBBER. I think we can make it much more contained, controlled, understandable and disclose material risk. I would argue is 

not quite that difficult. When we talk about, No. 1, what kind of 

disclosure are we looking at? What is the information that investors might benefit from? Be it me, if it is $4,000 in the company 

or Mr. Read who is managing $260 billion the last time I looked 

but he might correct me being off by a few billion. 

That is the first is regulatory risks. For a company that is about 

to build four coal-fired power plants, they could take a look at the 

regulatory schemes that are being negotiated in Congress. Material 

risk does not demand precise provision. But one can tell that given 

that a coal-fired plant lasts over 40 years, if the laws change and 

there is a price on carbon, there will be real cost to that electric 

utility company. They can calculate it, they can disclose it. Investors would want to know whether that next coal-fired power plant 

is going to cost $60 million or $160 million. 

There is risks like increased storms. Insurance companies have 

300 risk assessors on staff. They know how to assess risk from 


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storms. Until last year most of them were only assessing based on 

the year before, not the 5 years in the future or 10 years. The reality is they can make assessments on what kind of risks they face. 

And it is the insurers who have had a painfully low disclosure rate. 

So when we are looking at assessing physical risks, and one can 

make predictions based on scenarios, looking at regulatory risk, 

looking at the very real litigation risk that is growing. There are 

more and more companies at the wrong end of litigation, whether 

it is State Attorneys Generals or other litigators, those are real financial risks that I, as an investor, want to know. Is this company 

I am putting money in about to be sued? Is the cost of the product 

they are putting out about to go up exponentially because a price 

is being put on carbon? Those are real material risks. They can be 

calculated. There are standards out in the marketplace. That is the 

kind of information we are looking for and is crucial for investors 

to have when building a portfolio. 

Chairman REED. Thank you. 

Mr. Read, this is an opening to a huge topic and your response 

would be appreciated. 

Mr. READ. When I look at the issue, I think in terms of the financial tools that are used by financial analysts and specifically financial efficiency ratios that are used all the time. I think what we are 

talking about here is the introduction of carbon efficiency ratios. 

This is something which I think could be put out in some very compelling and intuitive ways, things that would be accessible to investors on a broad basis, that would be important to the marketplace, 

and could be digested I think relatively unambiguously. 

So when you think of these sorts of efficiency ratios, you think 

of, for instance, things that could be a carbon-to-sales ratios. Carbon sales ratio could be an example of it. There is a whole analog 

to carbon efficiency ratios that are analogous to the standard financial ratios that we look at all the time. 

Chairman REED. Thank you. 

I wanted to pose a general question to Mr. Smith first but allow 

individual panelists to comment briefly, and then I am going to recognize Senator Carper who has joined us. But there will be a second round because when Tom is finished I will initiate a few other 

questions. 

I was particularly struck and included in my statement the Carbon Disclosure Project survey, which suggest that if you ask a company privately is there a huge risk out there because of climate 

change, 81 percent say of course there is. Are there opportunities? 

Well, that is 69 percent, of course there is. 

But then you look at their disclosure and there is nothing like 

that. Mr. Smith you represent a lot of companies. Is it because they 

do not have the right guidance to disclose? Is it because there are 

rational business reasons? 

Mr. SMITH. Senator, I think there are a variety of reasons and 

I think this where I part company a little bit or maybe a lot with 

the other witnesses. That is, the hard truth, and it is very difficult 

for us to digest faced with the physics of the crisis at the moment, 

is that there are some things that are just fundamentally unknowable at the moment. And I think there is a great harm to the marketplace to put disclosure, particularly numerical disclosure, on 


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something that is fundamentally unknowable and unquantifiable. 

Whether you want to make up a metric and drop it on top, there 

are other sorts of ways. 

But I think the disconnect between projects such as the Carbon 

Disclosure Project, which are very valuable on their own terms, 

and 10Ks is not as great as it would seem. Because I think that 

responsible leadership in most responsible companies has the same 

view as the societal view. This is a medium to long-term risk which 

is going to be costly to correct, that we have to act on it soon because of the factors that Dr. Yohe described, and that there are 

also opportunities in that process. 

When you take it down the funnel and say what does this mean 

for me now, then you come up with a very different calculus. You 

may well be, to take my coal-burning utility in Ohio, you may know 

or may feel or your advisors here on the Hill may tell you that it 

is inevitable or virtually inevitable that there will be some sort of 

Federal legislation on this issue. But it is still a challenge, notwithstanding the immediacy of that event, it is a tremendous challenge 

to say what the consequences of that will be, what the shape of 

that legislation is going to be. And then to quantify what the costs 

of that might be to you. 

And to disclose that on a contingent basis, that is to say we believe based on best information here are the range of legislative 

outcomes, and based on our internal calculations here is the range 

of costs which each of these outcomes could impose on our company, that would really be more than a full-time job and I think 

not really ultimately all that helpful to the marketplace. 

On the other side of the equation, I think what we would I would 

urge is the SEC and obviously the marketplace generally needs to 

be poised really almost by the minute because the speed of these 

developments from a regulatory standpoint and from a financial 

standpoint has really been staggering. I think there needs to be a 

nimbleness so that there is a constant attention and evolution of 

what is useful but based on what is truly useful and not what can 

be made up as a number that placates people who are looking for 

numbers. Fake numbers are bad. 

Chairman REED. But would you suggest that there has to be at 

least an indication in these disclose materials that this is a factor? 

Even if you cannot quantify it. And that second—and what you 

presuppose is a very rational thoughtful process of evaluating and 

making a judgment that is not material, the question exists is that 

process going on in many boardrooms? Or is simply not a topic that 

is even—this is so far out of our perspective that we do not even 

worry about that stuff? 

Mr. SMITH. My view, and I think I have a fairly wide-based view 

but it’s not an exclusive view I believe, is that it is going on in a 

lot of board rooms. It has become rapidly and over the course of 

the last 2 or 3 years at least a weigh station and a checkpoint for 

most responsible boards, particularly boards in industries where 

there is likely to be an immediate effect, the automotive industry, 

the power industry, the aluminum sector, the steel sector, anybody 

who is carbon rich, carbon emission rich, and intensive. 

And also I think, interestingly, the fact that we are, in effect, 

trailing European markets on the cost of carbon because there is 


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an active auction market there, as you know, and there is a unit 

price. We do not live on an island or in a glass house and so there 

are many U.S.-based companies that have operations in the European theater who have now the capacity and ability and who do 

disclose with numerical specificity the cost of carbon to them in 

their operations. I have cited some examples in my written testimony of that. 

It is quite clear when there is a number I think responsible companies are disclosing those numbers. I think the tricky part is timing and not overwhelming the marketplace with data that is really 

not ultimately of use. 

Chairman REED. Let me ask the comments of other panelists before I turn quickly to Senator Carper, but we will have a chance. 

Ms. Lubber. 

Ms. LUBBER. I want to go back to what we are looking for is the 

disclosure of material risk, not any risk, not minor risks, not risks 

that cannot be calculated. But if we are seeing 60 or 70 percent disclosure voluntary that is not fully complete, shows that it can be 

done. When we see disclosure in the mandatory filings, in the 10ks, 

by DuPont, Johnson, GE, many electric utility companies, they are 

disclosing material risk. They are looking at scenarios. They are 

finding ways to come up with realistic numbers. And they are disclosing information. They have shown us that it can be done. 

The problem is when you look at two auto companies. Auto companies know there will be some change in CAFE standards, if not 

tomorrow, in 4 years, but looming. And given that their product 

lines take 7 or 8 years to get out, the fact of the matter is that if 

the CAFE standards change, fuel economy and their products have 

to change a bit, they need to know now. There will be a cost to 

making those changes. 

Those are the kind of things that can be calculated, that shareholders want to know who is best positioned to come out with a 

line of cars that are more fuel-efficient. Those are the material 

risks that can be disclosed. We see one auto company doing it in 

and another writing nothing. 

It tells me it can be done, it is being done, and we will all benefit 

from more consistency in seeing those material risks. Not every 

risk, not wacky calculations, but scenario planning which companies—that is what they do. Board members are charged with, as 

fiduciaries, looking at the risk to the company. This falls squarely 

in what boards should do, what disclosures should show, and what 

investors need in the marketplace. 

Chairman REED. Do you have a comment, very briefly? 

Mr. READ. I think there are two focal points to look at. One deals 

with sequence, one deals with standardization. 

Regarding sequence, there will be a requirement—you simply 

have to have standardized carbon disclosure before you have a carbon trading system. You could not have a credible carbon trading 

system without standardized disclosure. So there is a sequencing 

which, to the extent that we get into the serious talks regarding 

carbon trading regimes, you have to know what you are starting 

with. You have to know, and the marketplace itself has to have a 

guide for what the relative values will be. So in terms of sequencing, the information has to come before the trading system. 


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The second part is standardization. I think I really agree completely with Mr. Smith that different companies in good faith can 

have some different ways of measuring their carbon footprints. So 

what is the role that we are talking about here? I think the industry investors, and certainly the Senate and the Congress, can come 

up with some standardized measures, methodologies for measuring 

carbon footprint. So I do not think that is really the hurdle. 

But I think that is the opportunity here, to have standardization 

and standardization which can allow for eventually a carbon trading system or any other measurement system that you might 

choose to put in place. 

Chairman REED. Thank you. 

Dr. Yohe, please. 

Mr. YOHE. Thank you. Just briefly, after listening to this conversation and learning a lot, I would like to go back to first principles about the complexity of the problem and the notion that we 

are not going to solve the problem immediately. What we need to 

do is set up an environment wherein we make it clear that carbon 

is not free and that it will be more expensive next year than it is 

this. 

That suggests to me setting a targeted price for permits or, a tax 

for carbon and arranging for it to grow over time in a predictable 

and persistent manner. The key is that business understand what 

the price is and what it will be. 

Over a period of time within which the results further studies of 

the climate system will be emerging, that price should increase at 

something like the rate of interest. Reports of liabilities and material concerns could then be offered from a business environment 

within which uncertainty derived from climate policy would be 

minimized. 

Uncertainty would expand when, from time to time, policy adjustments would required in response to global portraits of how we 

are doing against long-term objectives. 

It is in these adjustments that the risks associated with all of 

those thresholds about which I spoke earlier come into play. Companies would have to try to anticipate what was going to happen 

to climate policy and how those adjustments were going to be 

made. If the adjustment process were sufficiently transparent 

though, the uncertainties affecting private business decisions could 

be managed. 

I am, here, making a distinction between the social cost of carbon 

(damages created by climate change aggregated across the globe 

and discounted to the present) and the private (policy derived) cost 

of climate policy to business. Is there a macro institution that does 

something like this—make manageable adjustments to short-term 

policy informed by long-term objectives? I would suggest maybe the 

Federal Reserve Board is such an institution. The FED has certain 

long-term targets for economic growth that inform its long-term objectives for growth in the money supply, but they also make adjustments in the short-term varying economic conditions. People who 

are affected by the FED’s decisions understand their process. They 

face material risks to changes in monetary policy, but they take 

this into account all of the time. Accounting for short-term climate 

policy would thus be a familiar problem cast in a different metric. 


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Chairman REED. Thank you very much, Dr. Yohe. 

Senator Carper, thank you. 

Senator CARPER. Thank you, Mr. Chairman. And to our witnesses welcome. I just want to make sure I have the correct pronunciation of all of your names. Dr. Yohe. 

Mr. YOHE. Yohe. 

Senator CARPER. Yohe. Yohe. 

Mr. Smith. 

Mr. SMITH. If you miss on me, we have got a lot to talk about. 

Senator CARPER. Although, in Delaware Y-o-h-e is always Yohe, 

but Yohe. 

Ms. Lubber. 

Ms. LUBBER. You have got it. 

Senator CARPER. And in Delaware, we would say George Read. 

He was one of our great colonial heroes. Is it Read? 

Mr. READ. Yes, sir. 

Senator CARPER. The Reads have it here. 

Maybe just a quick statement and then a couple of questions if 

I may. 

First of all, I thank the Chairman for convening this hearing and 

for letting an interloper come on, somebody who is not even on the 

Subcommittee, come in and not just sit here but also even ask 

questions. I am grateful for that opportunity. 

I think I may be the only member of the Banking Committee 

who serves on the Environment and Public Works Committee 

where I chair, along with the great help of Senator George 

Voinovich, a subcommittee that deals with climate change and nuclear safety and security. 

For a long time I felt—I think I can speak for Senator Voinovich, 

we believe that companies need certainty, particularly as they address the future, particularly companies providing electricity, utilities. And they are trying to figure out what the demand is going 

to be for their product, electricity. They are trying to figure out how 

to provide it. They are trying to guess what the regulations are 

going to be with respect to emissions of sulfur dioxide, nitrogen 

oxide, mercury, CO2, and the like. 

What I have heard from any number of utilities is tell us what 

the rules are going to be. Just tell us what the rules are going to 

be. Give us a reasonable amount of time, some flexibility and then 

get out of the way and we will figure out how to get this done. 

But they are interested in certainty and I am sure they are reflecting the views of not just their boards of directors but also the 

views of a lot of their investors who have a fair amount of money 

at stake in a number of these companies. 

I think climate change regulations are coming. If I were an investor, I would want to have some idea of what that will entail. 

I think it is tomorrow, there is a Subcommittee on the Environment and Public Works Committee, we are going to have a markup. You may have already talked about this before I got here. The 

Subcommittee will be chaired by Senators Lieberman and Warner, 

and they are going to attempt to move their climate change bill 

just addressing CO2. They are going to try to move it out of Committee to the full Environment and Public Works Committee. 


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I think the bill contains a provision that requires the SEC to promulgate regulations requiring companies to disclose their climate 

change risks. And I have a copy here of the language, it is actually 

pretty brief. Mr. Chairman, with your indulgence, I would just like 

to read it if I may. It is not that long. I will read the first portion 

of it. 

‘‘Section 9002, Corporate Environmental Disclosures of Climate 

Change Risk.’’ That is what this section is entitled. I will but just 

read the first paragraph. It says ‘‘Regulations: not later than 2 

years after the date of enactment, the Securities and Exchange 

Commission shall promulgate regulations in accordance with Section 13 of the Securities Exchange Act of 1934, directing each 

issuer of securities under that act to inform, based on the current 

expectations and projections and knowledge of the facts of the 

issuer, securities investors of material risk relating to——’’ and 

they mention two things. 

The first of the two things they mention is ‘‘the financial exposure of the issuer because of the net global warming pollution emissions of the issuer.’’ And the second is the ‘‘potential economic impact of global warming on the interests of the issuer.’’ 

Those are the two things that are mentioned. And then they go 

on to mention some other stuff, uniform format for disclosure and 

some other information. That is really the heart of the provision. 

My question, really for all of you, would be to ask you to just let 

Senator Reed and me know what you think of this idea. And I will 

pass this on to the folks at the Committee, the other Committee. 

Anyone just jump in, in no particular order. Ms. Lubber. 

Ms. LUBBER. We are big fans of the movement on mandatory disclosure—— 

Senator CARPER. Would you start that over again? 

Ms. LUBBER. I am sorry. I am Mindy Lubber, and we are big fans 

of mandatory caps on carbon, which the Lieberman-Warner bill 

has. And we are delighted that this kind of disclosure provision is 

embedded in it. 

I could not agree with you more that the business community 

and everybody else likes certainty. They want to know what the 

rules of the game are. We know that there will be carbon regulation coming or a major statute. There are 10 different versions. I 

think the business community is owed, as well as everybody else, 

a clear statute that gets passed sooner rather than later, given the 

gravity and the magnitude of the problem. And they will figure out 

how to get in line with compliance. 

When we were all part of the debate around the Clean Air Act 

and the Clean Water Act, there were all sorts of this is going to 

kill the business community, it is too much regulation, it costs too 

much. And once the certainty was provided, once the statutes were 

put in place, there has been nothing in history that has seen the 

kind of change in air emissions and in water emissions and the 

magnitude and the speed at which the problems got better. 

That is the speed we have got to be seeing, given the magnitude 

of the problem of global warming. And I think moving expeditiously 

on a statute that puts a cap on carbon and a cost on carbon. Right 

now carbon pollution is free so we keep getting more of it. Putting 

a price on it and a limit on it is the certainty that we need to put 


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in place. And we would love to see that move expeditiously with 

this kind of disclosure certainty included in it. 

Senator CARPER. Thanks very much. 

May I hear from others, please? Dr. Yohe. 

Mr. YOHE. If I understood what you read correctly, and it is the 

first time I have heard it, they are asking for disclosure of material 

risks from climate impacts as opposed to material risks from climate policies. 

Senator CARPER. I think that is correct. 

Mr. YOHE. I think that we need to go back to what I said earlier. 

The subtext there is that attribution of observed risk to climate 

change is a very difficult task that we cannot expect businesses to 

accomplish. Senator Reed, you asked earlier about a specific company. I still do not have a specific company, but let me focus on 

a specific location. Consider a company that was located in New 

Orleans say 3 years ago. Of course, Katrina came and the levees 

broke. Perhaps our company was destroyed. Maybe it is back in 

place now, but maybe it is not. 

Now think about what they might have reported about material 

risk from climate change in 2003. It was certain back then that a 

hurricane would strike New Orleans at some point. Could our business attribute Katrina, or its intensity, to climate change? Probably 

not. Would they have been required to do so if the Lieberman-Warner bill on climate change had been in place back then? Attribution 

is so difficult that I am doubtful that requiring them to do so would 

have been a good thing. 

The chance of a severe hurricane was surely a material risk that 

should have been reported. I hope that representatives from our 

business would have attended all of the workshops that were held 

along the Gulf Coast prior to Katrina. Those workshops clearly outlined the risks associated with rising sea levels and severe coastal 

storms. Our business may have even heard the Army Corps of Engineers describe how vulnerable the levees were. But to hold our 

business responsible for saying that these risks were born of climate change is, for me, a little bit hard to swallow. 

Senator CARPER. Thank you. Mr. Smith. 

Mr. SMITH. I have, I guess, two reactions. First of all, from a 

process standpoint, my immediate reaction to the provision is that 

it is useful but not necessary. And that is that there are mechanisms that are lesser than a statutory mechanism for achieving the 

same result, and that have actually worked sometimes with fine 

tuning and sometimes with macro tuning in other examples to prod 

the disclosing community along to refine their thinking, to say 

more. I am thinking principally of Staff Accounting Bulletin 92, 

which was issued with respect specifically to Superfund litigation 

and remediation liabilities in 1992. 

And then out of the environmental arena, the very useful, short 

and terse work that the staff did with respect to the millennium 

bug, the Y2K bug, which was a pervasive problem. One of the requirements there was to compel disclosure, but on a Staff Legal 

Bulletin basis, on the degree of preparedness of a company to meet 

the issue. And if they had not done an assessment, that that fact 

itself was material because you had not looked and therefore the 


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investment community needed to know that you had not even bothered to look. 

That is my process comment. 

If the Senator will indulge me for a second for a story from experience from a substantive standpoint, I think that the distinction 

lies between two companies, one with whom I had experience— 

privatizing a pulp and paper business in another country that had 

a mill—a material mill—situated on a peninsula jutting out into a 

saltwater body and took all of its process water from the aquifer 

underneath the peninsula. And took huge volumes of it up. And 

just as their billion-dollar bond issue was about to come to market, 

started getting salt water readings in its fresh water wells, which 

would have been fatal to its paper production. 

The onset of even those negligible readings of saltwater in a mill 

of that importance was something that was an immediate and material risk, disclosable, and was disclosed. That is useful disclosure. 

If you are going to buy a piece of those bonds, you needed to know 

that certain parts of the mill might not work if saltwater intrusion 

continued. 

On the other side, I would hate to have legislation that compelled 

disclosure of a catalog of risks that were not particular to the actual workings of a particular business. You might have a water dependent business in the Midwest in the United States that clearly 

would be adversely affected if global warming dried streams on 

which it relied for discharge or for cooling water. But if there were 

no scientific data behind the event, then simply to disclose that we 

are dependent on heavy usage of water is not necessarily useful for 

the marketplace, and the degree of quantifications necessary would 

certainly not assist in the pricing of any investment in that particular company. 

Senator CARPER. Good, thank you. And thanks for the example. 

Mr. Read, my time has expired, but just briefly, if you would 

take a shot at this one. 

Mr. READ. Very briefly, from my vantage point, sufficient regulatory authority does exist already by the SEC to compel appropriate disclosure. However, although they have that ability now, I 

think it likely will take prodding by your body to compel the SEC 

to put those disclosure standards in place. 

Senator CARPER. Thanks so much. Thank you all. 

Thank you, Mr. Chairman. 

Chairman REED. Senator Casey, if you have questions. 

Senator CASEY. Mr. Chairman, thank you very much. 

I have to apologize. I was running out to the floor and walking 

at a fast pace, running on the way back. I wanted to, first of all, 

say that when I was giving my opening, Ms. Lubber, you were at 

that time and still are have a network that I referred to and I did 

not acknowledge it and I am sorry about that. I did not realize. I 

was reading the first part where they say president of—is it Ceres? 

Is that how you pronounce it? 

Ms. LUBBER. Ceres. 

Senator CASEY. Ceres. But I did not read the rest of it. It says 

Director, Investor Network on Climate Risk, which I was talking 

about. I am sorry about that. 


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But I guess the general question I have for really everyone on 

the panel, and I know you have spoken to this either in your statement or when I was gone so some of it might be redundant. But 

it is good to repeat ourselves on important topics, I think. 

Just what you think, if you had an agenda item or an action 

agenda for the U.S. Senate, other than having a hearing like this, 

which I think is a critical component of having a strategy, what 

would you have us do in the next year to advance some of the goals 

that you have outlined today? And maybe I will go right to left or 

left to right, it does not matter to me. Mr. Read. 

Mr. READ. I think there have been some points brought up today, 

Dr. Yohe mentioned one of them, which is likely there should be 

a healthy debate on the comparative merits of a carbon trading 

system, for instance, versus a carbon tax. This is more than what 

it might seem, though, at first because there are different—they 

really are different tools. You can get to different things. 

For instance, with a carbon tax you potentially could apply that 

not only to U.S. companies but to international companies which 

provide imports to the U.S. You can apply it in different ways, I 

think. You can have a very—for instance, if there is a larger carbon 

footprint from companies in China, you could make the appropriate 

assessments on that potentially with a carbon tax in a way that 

you could not with a carbon trading system. 

There are going to be some very important issues that you can 

get at just by having that debate on the tax versus the carbon trading system. So I think it is worth having it. Irrespective of where 

you end up, you are going to be in a better place having that argument in good form. 

Of course, the actual impact of—well, when it comes to global 

warming, carbon is not the only issue. There are many other forms 

of greenhouse gases. So we think in terms of CO2, but there are 

lots of other challenges that we are going to be facing. For instance, 

there could be material wealth of methane that could be going into 

the atmosphere over the coming years. Methane is a good 30-fold 

greater impact than CO2 on the atmosphere. 

The other part, I think, that I would really wrestle with very seriously is that the social goal that we are looking at, for instance, 

when looking at renewable fuels, is looking at renewable and clean 

technologies over conventional and dirtier technologies. So what 

that points to is the need for broad-based support rather than narrow support. So I think now when I look at the nature of what is 

supported, it is not as much—I take a look at some things, unwittingly by having too narrow a sense of what our renewable or clean 

fuels, things can happen like for instance using methane as fuel 

from municipal waste does not receive a subsidy. That can get 

crowded out compared to corn-based ethanol. That would not be the 

intent of the Senate right now, to have one clean technology crowd 

out another. 

But I think the imperative for trying to have broad-based incentives for renewables will be also an important consideration for this 

body. 

Senator CASEY. Thank you very much. 


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Ms. LUBBER. I am going to answer the question in wave the 

magic wand, you asked that open question and I appreciate it. I 

think, given that magnitude of the problem—— 

Senator CASEY. We do not have one, by the way. 

Ms. LUBBER. If you could find me a magic wand or if I could find 

one, I will bring it to you. 

But given the magnitude of the problem, which is up there with 

the greatest economic, environmental, national security, public 

health threats we face. Given that it is not any time in the future 

but we are now starting to see the impacts now. Given that we are 

certain that the problem is getting worse and not better. And given 

that we know minimally, and I think the IPCC Commission is 

going to tell us that this may even be an understatement, that we 

need to reduce are carbon footprint by 80 percent by the year 2050 

and that we have got to start that yesterday. 

These are big issues. My magic one would say if the Senate, with 

your leadership from this Committee and others, should move to 

pass a comprehensive cap and trade or a tax—I look at the cap and 

trade not because I think it is smarter or more elegant or even 

preferable, but more realistic. Literally put a price on carbon. This 

gas that is going into the air is not free. It costs us a lot of money. 

But when things are free you get a lot more of it. Right now carbon 

pollution is free. 

I would put a price on carbon and a limit to the amount that can 

go up into the air, a cap and trade system. With very clear limits 

not only for what we need to get to 2050, but what needs to be happen by 2030 and 2020. 

At the same time I would have incentives that will help jumpstart an industry that is going to also allow us to meet the energy 

needs of this country and beyond. If, in fact, we are going to limit 

the carbon going into the air and limit the coal use and limit some 

other fuels, we have got to make sure we are jump-starting the industry that will allow us to keep our cost of living and keep moving. 

And I certainly think there is movement to do that but that is 

what I believe will get on top of the problem. 

I want to add just one point, and that is the issue being debated 

at this hearing, I would argue, is more narrow, is more doable, is 

nevertheless quite an important stepping stone and does not even 

require statutory change. The SEC has the authority to require the 

disclosure of material risks. Many companies are doing that. Those 

companies say when they do it, when they just assess their risk 

even before they disclose. They end up managing it better. We 

know that is information that ought to be the marketplace. We are 

seeing it done. It is not overly burdensome. We know the standards 

by which we want to measure it. 

I think that is something that could happen now that will make 

a difference in moving us forward and that, with the leadership of 

this Committee and a discussion perhaps with the SEC, we can 

move on this without statutory changes and without even regulatory changes. And it will go a long way in helping move companies to act to reduce their carbon footprint. 

Mr. SMITH. Senator, I have never been very good at magic wand 

questions. I do not even know what my favorite ice cream is. So 


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I am going to limit the question to the scope of what I came to talk 

about, which was disclosure. 

I think clearly the most significant thing, from my perspective, 

is to grant the marketplace the clarity of information which the 

Senator was talking about having heard about with respect to utilities and their desire for clarity of regulation. 

I think this hearing is extremely timely. The Superfund examples that I talked about earlier in my testimony and have written 

about in my written testimony were done, unfortunately, years 

after the fact. The fact that this hearing is being held today, before 

any comprehensive Federal legislation, I think really is a tremendous window of opportunity for teeing up and aligning what the 

Federal regulatory solution is going to be with what it dictates to 

the marketplace about what to say about that regulation is going 

to be. 

I would encourage this Committee and the Senate as a whole to 

maintain that synchrony to the greatest extent possible, so that the 

markets that are going to drive the solutions once there is certainty 

can also drive out information with clarity and under clear guidelines on a going forward basis. 

If we had to do it and waste 5 years and go backwards the way 

we did with Superfund, I think that would be a lost opportunity 

and a terrible mistake. 

Thank you. 

Senator CASEY. Doctor. I know we have a vote that, I think, just 

started. 

Mr. YOHE. I will try to be quick. IPCC is not policy proscriptive, 

so we certainly do not say that an 80 percent reduction by 2050 is 

required. My own personal view is we have to get to an 80 percent 

reduction sometime in this century. Picking 2050 is a good place 

to start the discussion, but it might be too early or too late. 

I also agree that you should think seriously about taxing carbon 

as it enters the economy. I think that you need to hear why cap 

and trade was a good idea for regulating sulfur dioxide emissions 

and why the economics that made it right for sulfur dioxide do not 

necessarily apply to carbon emissions. 

Fundamentally, though, I think members of the Senate should 

remember that there is another component to the United Nations 

Framework Convention on Climate Change that this country has 

signed. We have, through the Convention, agreed to help the least 

vulnerable people on the planet adapt to and cope with the impacts 

of climate change. The new negotiations for the second commitment 

period of the Kyoto Protocol include international discussions about 

how to create and manage adaptation funds. We need to participate 

fully in those discussions I think, as well (and I guess Speaker 

Pelosi has suggested this and has thereby caused a bit of an uproar), that representatives of the legislative branch of this Government should go to Bali (and subsequent meetings of the Conference 

of the Parties of the Framework Convention) as observers to see 

the negotiations first hand. 

Mitigation and adaptation will both be on the table, and you all 

need to get a full understanding of exactly the way the world looks 

at us, exactly the way the world looks at the problem, and exactly 


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the way the world looks at the requirement to do both—i.e., to 

mitigate and to adapt. 

The fact is that we are committed to another half degree to one 

degree Centigrade warming over the next century even if greenhouse gas emissions ended tomorrow. Adaptation is an imperative. 

Working on how best to adapt is not giving up on the problem. Adaptation is an essential part of a policy portfolio that is absolutely 

required. 

Senator CASEY. Thank you and I thank the Chairman for the 

extra time. 

Chairman REED. Thank you, Senator Casey. And thank you for 

your wonderful testimony. This has been informative and insightful 

and, I think, hopefully prophetic. Mr. Smith’s comments about the 

timeliness of the hearing, I concur entirely. 

Let me make just brief administrative announcements. Some of 

my colleagues might have additional written statements. They will 

all be made part of the record. 

If there are additional questions for the witnesses or if there is 

additional testimony, that will be accepted no later than November 

7th. We would ask the witnesses if you do receive written questions, please respond within 10 days. 

But thank you very much for your participation today and for 

your great work throughout the year. 

The hearing is adjourned. 

[Whereupon, at 3:53 p.m., the hearing was adjourned.] 

[Prepared statements and additional material supplied for the 

record follow:] 


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PREPARED STATEMENT OF SENATOR MENENDEZ 

I want to thank Chairman Reed and Ranking Member Allard for putting together 

this important hearing. 

If there is anything I hope we can take away from today’s discussion, it is that 

climate change does not exist in a bubble. The fact that we are having a hearing 

on this issue in the Banking Committee speaks to its very nature. Asking the questions of what we can do to affect global climate change is not limited to those who 

advocate for the environment or to improve our energy usage. It is not limited to 

one region of the world, or to certain cities. It is not limited to just one sector. The 

responsibility falls on all of us. And we must all be asking the questions of what 

we can do to affect our climate—especially those of us who think we have little or 

no role. 

Today we have a chance to ask those questions, to look at what those in the financial sector are doing, to ask those who perhaps do not think about emissions on a 

daily basis to do more. 

It is imperative that our nation make a transition to a cleaner, safer, greener, and 

wealthier country. We must take action to stabilize greenhouse gas emissions and 

ward off the potentially catastrophic effects of global warming. This will not happen 

by itself, however. 

I am pleased that Senators Lieberman, Warner, and Boxer have shown such leadership in the issue of climate change by introducing and moving a bill forward. This 

bill would take a number of important steps, including requiring the reporting of 

climate risks. However, I do think we should look closely at how the bill deals with 

corporate reporting of climate risks and greenhouse gas emissions, and believe there 

could be room for improvement. 

First I think it is important to distinguish between two very different kinds of 

reporting. 

On the one hand, we want investors to know whether companies are faced with 

financial risks because of the potential effects of climate change. These risks range 

from increased insurance claims to physical risks such as stronger storms or flooding. In general these risks are difficult to quantify or even predict, but are nonetheless terribly important for those making investment decisions. 

The second kind of risks that should be reported are the risks associated with the 

necessary changes we will all have to make in order to reduce global emissions. 

These risks are also difficult to predict and also difficult to put into dollar terms, 

but I would submit that these risks can be quantified. 

What future regulations will entail or what costs they might impose cannot be 

foretold, but if companies simply reported their emissions to investors then investors 

would be empowered to make their own calculations on potential exposure or the 

likelihood of different sets of policies being enacted. Without such data investors will 

be limited to what companies choose to disclose and left to trust the company’s own 

assessments of financial risk. 

Unfortunately I do not read the Lieberman Warner bill to require such disclosures. Instead it gives the SEC broad discretion to formulate risk reporting associated with climate change. 

My staff is currently working on some language that I feel must be part of any 

corporate reporting on climate change: 

First, the EPA is the organization with the expertise and experience in administering greenhouse gas emissions reporting programs. The SEC must work alongside the EPA to design such a program here. 

Second, emissions reporting should be done at the corporate level and not just at 

the facility level. And this reporting needs to include indirect emissions such as electricity use and not just direct emissions. Climate leaders such as Citigroup, Target, 

and Marriott do not have large industrial facilities or power plants that would be 

covered by the Lieberman Warner bill. Yet all three companies are voluntarily reporting their emissions to the EPA. They realize that they can significantly help reduce our nation’s carbon footprint and they want to be held accountable for taking 

this responsibility seriously. In turn, investors such as those represented by CERES 

here today want to know what organizations are sensibly planning for the future 

and who is stuck in the mindset of last century. 

Third, emissions must also be reported by country. Different nations operate 

under different regulatory regimes and therefore multinational corporations are exposed to different risks. 

I’m afraid I cannot stay for the whole hearing today, but I would like to hear from 

the witnesses on this issue, and I will be submitting questions for the record. 

Again, I want to thank Chairman Reed and Ranking Member Allard for their 

work in putting this hearing together. I look forward to working with them, this 


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Committee and the EPW committee in putting together climate change legislation 

that will help us transform our economy and protect investors at the same time. 


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dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 177 here 50362A.094
122 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 178 here 50362A.095
123 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 179 here 50362A.096
124 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 180 here 50362A.097
125 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 181 here 50362A.098
126 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 182 here 50362A.099
127 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 183 here 50362A.100
128 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 184 here 50362A.101
129 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 185 here 50362A.102
130 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 186 here 50362A.103
131 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 187 here 50362A.104
132 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 188 here 50362A.105
133 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 189 here 50362A.106
134 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 190 here 50362A.107
135 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 191 here 50362A.108
136 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 192 here 50362A.109
137 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 193 here 50362A.110
138 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 194 here 50362A.111
139 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 195 here 50362A.112
140 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 196 here 50362A.113
141 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 197 here 50362A.114
142 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 198 here 50362A.115
143 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 199 here 50362A.116
144 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 200 here 50362A.117
145 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 201 here 50362A.118
146 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 202 here 50362A.119
147 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 203 here 50362A.120
148 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 204 here 50362A.121
149 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 205 here 50362A.122
150 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 206 here 50362A.123
151 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 207 here 50362A.124
152 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 208 here 50362A.125
153 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 209 here 50362A.126
154 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 210 here 50362A.127
155 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 211 here 50362A.128
156 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 212 here 50362A.129
157 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 213 here 50362A.130
158 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 214 here 50362A.131
159 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 215 here 50362A.132
160 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 216 here 50362A.133
161 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 217 here 50362A.134
162 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 218 here 50362A.135
163 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 219 here 50362A.136
164 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 220 here 50362A.137
165 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 221 here 50362A.138
166 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 222 here 50362A.139
167 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 223 here 50362A.140
168 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 224 here 50362A.141
169 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 225 here 50362A.142
170 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 226 here 50362A.143
171 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 227 here 50362A.144
172 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 228 here 50362A.145
173 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 229 here 50362A.146
174 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 230 here 50362A.147
175 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 231 here 50362A.148
176 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 232 here 50362A.149
177 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 233 here 50362A.150
178 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 234 here 50362A.151
179 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 235 here 50362A.152
180 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 236 here 50362A.153
181 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 237 here 50362A.154
182 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 238 here 50362A.155
183 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 239 here 50362A.156
184 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 240 here 50362A.157
185 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 241 here 50362A.158
186 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 242 here 50362A.159
187 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 243 here 50362A.160
188 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 244 here 50362A.161
189 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 245 here 50362A.162
190 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 246 here 50362A.163
191 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 247 here 50362A.164
192 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 248 here 50362A.165
193 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 249 here 50362A.166
194 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 250 here 50362A.167
195 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 251 here 50362A.168
196 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 252 here 50362A.169
197 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 253 here 50362A.170
198 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 254 here 50362A.171
199 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 255 here 50362A.172
200 


dcolon on DSK2BSOYB1PROD with HEARINGInsert offset folio 256/400 here 50362A.173