New York Bill Targets Climate Risk Disclosure for Corporations
A new bill introduced in the New York State Assembly is aiming to hold major corporations accountable for financial risks tied to climate change. The legislation, known as A07195 and proposed by Assemblymember Otis, would mandate that corporations operating in the state with annual gross revenues of at least $500 million submit annual reports detailing climate-related financial risks. The bill was referred to the Committee on Corporations, Authorities, and Commissions on March 21, 2025.
The primary goal of the bill is to increase corporate transparency concerning financial risks related to climate change. If enacted, the law would oblige covered corporations to file reports with the secretary of state, making them accessible to the public.
Key provisions of the bill:
- Corporations with annual gross revenues of $500 million or more must assess and disclose climate-related financial risks.
- Reports must adhere to the guidelines set by the Task Force on Climate-Related Financial Disclosures (TCFD) or a comparable framework.
- Companies must outline actions they are taking to mitigate the financial risks stemming from climate change.
- Reports must be submitted annually and made available to the public via company websites and the secretary of state’s office.
This legislation could have a substantial impact on the insurance and financial sectors. Insurers might need to adjust their underwriting policies based on the disclosed risks, which could lead to higher premiums for corporations deemed high-risk due to their climate vulnerabilities. Financial institutions may also be required to incorporate climate risk into their investment and lending decisions, thereby influencing corporate financing strategies.
Furthermore, corporations might face pressure from investors and stakeholders to adopt more sustainable business practices to mitigate their climate-related financial exposure. This could quicken the acceptance of climate-conscious corporate governance and risk management practices across several industries.
While the bill aligns with the increasing trend toward corporate climate accountability, it is anticipated to face opposition from business groups concerned about the regulatory burden. Supporters argue that mandatory climate risk disclosure is essential for maintaining financial stability and ensuring long-term economic resilience.
