SEC Should Require Companies to Disclose Risk of Global Warming Regulation, Study Says; Companies Risk Earnings While Keeping Shareholders in the Dark, Reports Free Enterprise Education Institute

Oct 01, 2007, 01:00 ET from Free Enterprise Education Institute

    WASHINGTON, Oct. 1 /PRNewswire-USNewswire/ -- The Securities and
 Exchange Commission (SEC) should take immediate steps to require
 publicly-owned corporations to reveal the potential harm caused by global
 warming regulations on earnings and shareholder value, concluded a study
 released today by the Free Enterprise Education Institute (FEEI).
     The report, "Failure to Disclose: Businesses Lobbying for Global
 Warming Regulation Keep Shareholders in the Dark," finds that many
 corporations supporting greenhouse gas regulations have failed to warn
 shareholders about the harmful consequences these regulations pose to
 future earnings.
     Surprisingly, only five of the twenty-one members of the U.S. Climate
 Action Partnership (USCAP), a lobbying group supporting global warming
 regulation and cap-and-trade schemes, have disclosed in their annual SEC
 filings that limits on greenhouse gas emissions pose a business risk.
     Efforts to limit greenhouse gases at the state and local level already
 unequivocally demonstrate these regulations are a legitimate business risk
 to USCAP members:
     -- General Electric is fighting federal and state legislative efforts to
        ban the incandescent light bulbs -- a GE product and invention of
        Thomas Edison, the company's founder. Government officials want to
        require consumers to purchase only the more energy efficient compact
        fluorescent light bulbs (CFLs). Shareholders are also threatened by
        efforts to ban coal-fired power plants. GE supplies steam turbines for
        these power plants.
 
     -- PepsiCo is facing bans on bottled water. Critics complain the
        production and transportation of bottled water wastes energy and
        contributes to greenhouse gas emissions. San Francisco city agencies no
        longer purchase bottled water because of global warming concerns.
     "USCAP members must inform shareholders about legitimate risks to their
 business," said Steve Milloy of FEEI. "Failure to disclose exposes these
 companies to shareholder lawsuits -- especially since greenhouse gas
 regulations are materially impacting these companies," added Milloy.
     The study finds USCAP membership is controversial and it has created
 conflict between businesses and their customers.
     Caterpillar Inc., for example, is dealing with a boycott from a coal
 industry customer because of company participation in USCAP. A government
 study reported that cap-and-trade regulations would cause a 40 percent
 reduction in coal production. According to the Caterpillar CEO, the
 decision to join USCAP was not based on an economic assessment of the costs
 and benefits of the regulations to the company.
     "Shareholders have a right to know that Caterpillar may face a backlash
 from other coal companies and energy intensive companies, like the steel
 industry, whose businesses will be ruined by cap-and-trade regulations,"
 said Tom Borelli of FEEI. "If the boycott picks up momentum, Caterpillar
 could easily be facing shareholder lawsuits. Making matters worse, the CEO
 did not exercise basic due-diligence in deciding to support regulations --
 negligence is a powerful argument for trial lawyers," added Borelli.
     The study also finds that non-USCAP members should disclose the impact
 of global warming regulations to its shareholders. Wal-Mart, for example,
 is the largest private user of electricity and its trucks travel an
 estimated 1 billion miles every year.
     "High-energy prices -- a direct consequence of global warming
 regulations -- would dramatically increase Wal-Mart's operating costs and
 hurt consumer spending," said Borelli. "Shareholders should be alerted to
 the fact that global warming regulations will potentially devastate
 Wal-Mart's future earnings," Borelli added.
     "Failure to Disclose: Businesses Lobbying for Global Warming Regulation
 Keep Shareholders in the Dark" is available online at the following
 websites: http://www.demanddebate.com, http://www.freeenterpriser.com, and
 http://www.junkscience.com.
 
 

SOURCE Free Enterprise Education Institute
    WASHINGTON, Oct. 1 /PRNewswire-USNewswire/ -- The Securities and
 Exchange Commission (SEC) should take immediate steps to require
 publicly-owned corporations to reveal the potential harm caused by global
 warming regulations on earnings and shareholder value, concluded a study
 released today by the Free Enterprise Education Institute (FEEI).
     The report, "Failure to Disclose: Businesses Lobbying for Global
 Warming Regulation Keep Shareholders in the Dark," finds that many
 corporations supporting greenhouse gas regulations have failed to warn
 shareholders about the harmful consequences these regulations pose to
 future earnings.
     Surprisingly, only five of the twenty-one members of the U.S. Climate
 Action Partnership (USCAP), a lobbying group supporting global warming
 regulation and cap-and-trade schemes, have disclosed in their annual SEC
 filings that limits on greenhouse gas emissions pose a business risk.
     Efforts to limit greenhouse gases at the state and local level already
 unequivocally demonstrate these regulations are a legitimate business risk
 to USCAP members:
     -- General Electric is fighting federal and state legislative efforts to
        ban the incandescent light bulbs -- a GE product and invention of
        Thomas Edison, the company's founder. Government officials want to
        require consumers to purchase only the more energy efficient compact
        fluorescent light bulbs (CFLs). Shareholders are also threatened by
        efforts to ban coal-fired power plants. GE supplies steam turbines for
        these power plants.
 
     -- PepsiCo is facing bans on bottled water. Critics complain the
        production and transportation of bottled water wastes energy and
        contributes to greenhouse gas emissions. San Francisco city agencies no
        longer purchase bottled water because of global warming concerns.
     "USCAP members must inform shareholders about legitimate risks to their
 business," said Steve Milloy of FEEI. "Failure to disclose exposes these
 companies to shareholder lawsuits -- especially since greenhouse gas
 regulations are materially impacting these companies," added Milloy.
     The study finds USCAP membership is controversial and it has created
 conflict between businesses and their customers.
     Caterpillar Inc., for example, is dealing with a boycott from a coal
 industry customer because of company participation in USCAP. A government
 study reported that cap-and-trade regulations would cause a 40 percent
 reduction in coal production. According to the Caterpillar CEO, the
 decision to join USCAP was not based on an economic assessment of the costs
 and benefits of the regulations to the company.
     "Shareholders have a right to know that Caterpillar may face a backlash
 from other coal companies and energy intensive companies, like the steel
 industry, whose businesses will be ruined by cap-and-trade regulations,"
 said Tom Borelli of FEEI. "If the boycott picks up momentum, Caterpillar
 could easily be facing shareholder lawsuits. Making matters worse, the CEO
 did not exercise basic due-diligence in deciding to support regulations --
 negligence is a powerful argument for trial lawyers," added Borelli.
     The study also finds that non-USCAP members should disclose the impact
 of global warming regulations to its shareholders. Wal-Mart, for example,
 is the largest private user of electricity and its trucks travel an
 estimated 1 billion miles every year.
     "High-energy prices -- a direct consequence of global warming
 regulations -- would dramatically increase Wal-Mart's operating costs and
 hurt consumer spending," said Borelli. "Shareholders should be alerted to
 the fact that global warming regulations will potentially devastate
 Wal-Mart's future earnings," Borelli added.
     "Failure to Disclose: Businesses Lobbying for Global Warming Regulation
 Keep Shareholders in the Dark" is available online at the following
 websites: http://www.demanddebate.com, http://www.freeenterpriser.com, and
 http://www.junkscience.com.
 
 SOURCE Free Enterprise Education Institute