In a major win for investors and climate-change activists, Dynegy, Inc. (NYSE: DYN) will begin disclosing its financial risks from global climage change, under an agreement with the State of New York.
Houston-based Dynegy owns coal-fired power plants in more than a dozen states and recently announced plans to build new units in at least six states in a joint venture with LS Power Group of East Brunswick, New Jersey.
Dynegy has been called the "king" of coal-fired power plants by the National Environmental Trust.
Environmental Defense Fund filed a petition with Attorney General Cuomo to the SEC in September 2007 in which a coalition, including the nation’s largest institutional investors, requested clarifying guidance on the disclosure of materials risks related to climate change.
Cuomo’s office has been investigating whether energy companies properly disclose the risks posed by climate change.
Cuomo and former Vice President Al Gore discussed the agreement and
the importance of this industry-wide precedent, both in terms of
corporate transparency and responsibility, and the effort to fight
global warming, during a news conference in New York City yesterday.
"Investors have a right to know all the material financial risks faced by coal-fired power plants associated with global warming," Cuomo said in a statement. Gore said the agreement "is a key step in the effort to solve the climate crisis."
Under the agreement, Dynegy will disclose information in its annual 10-K filing to the Securities and Exchange Commission. It will give an analysis on how its business will be affected by probable future climate change regulations, current climate change-related litigation and the physical impacts of climate change.
The company will also disclose its strategies for reducing or managing emissions.
Andrew Darrell, Vice President of the Environmental Defense Fund, said, "Federal regulators should take a hard look at the Attorney General’s settlement and standardize companies’ disclosure of climate-related financial risks to ensure a fair marketplace for all investors."
Cuomo reached a similar agreement with Xcel Energy (NYSE: XEL) in August 2008.