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This report assesses how rising concerns about climate change are affecting disclosures to financial markets by looking systematically at 10-K filings from the 3000 largest U.S. publicly traded firms over the last 12 years and samplings ofOfficial Statements from all U.S. municipal bonds. For equities, disclosure has risen sharply. Today, 60% of publicly traded firms reveal at least something about climate change, but the largest volumes of information are skewed heavily toward a few industries (e.g., electric utilities, oil & gas, mining) and concern valuation risks due to possible transition away from fossil fuels. By contrast, there is much less disclosure around the physical risks of climate change.

In municipal finance,disclosure of physical risks is even weaker, although many municipalities are highly exposed to flood, fire, heat stress, and other perils that could both destroy infrastructure and undermine the tax and income bases essential to repayment of long duration bonds. Innovations in climate science over the last decade make it possible to assess these physical risks at fine geographical resolution (counties), but we find no relationship between such measures and municipal disclosure. Remedies include infrastructure audits and new analytical capabilities that can help lower the cost and raise utility of meaningful disclosure along with stronger regulatory rules and industry norms. New practices at credit rating agencies and rethinking of liability rules could rapidly accelerate best practices. Details are presented in a “Supplemental Information” (SI) appendix.