The Securities and Exchange Commission, for example, was probing how ExxonMobil discloses the impact of that risk on the value of its reserves. And disclosure advocates have been pressing the agency to take more decisive action.

Now that Republicans control Congress and the White House, will the SEC reverse course? And should it?

The Trump administration’s apparent skepticism regarding climate change may portend such a change in direction. And Congress’ decision to roll back transparency rules for U.S. energy companies in the Dodd-Frank Act suggests transparency policy more broadly is being loosened.

The terms of this debate, however, remain premised on the notion that investors don’t have enough information to accurately assess the impact of climate change on company value. A growing body of academic research, including our own, suggests they already do and that a compromise path that improves the terms and conditions for voluntary disclosure might be optimal.

“Stranded” Assets

Such a change in direction would be good news for ExxonMobil in its fight with the SEC over climate change disclosure.

Last year, ExxonMobil announced that 4.6 billion barrels of oil and gas assets — 20 percent of its current inventory of future prospects — may be too expensive to tap. That would be the largest asset write-down in its history. So far, the company has written down US$2 billion in expensive, above-market cost natural gas assets. More write-downs — this time possibly oil sands — may be forthcoming.

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