Clarification appended.
Peabody Energy Corp. announced plans yesterday to raise $1 billion from investors but did not mention climate change or emissions-cutting policies as investment risks. That exclusion came one month after Peabody finalized an agreement with New York’s attorney general to file updated public documents about its financial hazards related to climate change and potential climate regulations.
In the document filed yesterday with the Securities and Exchange Commission, Peabody did not reference climate change, greenhouse gases, carbon emissions, global warming or any comparable terms or phrases.
The St. Louis-headquartered company, the largest publicly traded coal company in the world, listed competition from natural gas and renewable energy as risk factors to would-be investors, as well as "new environmental" regulations — a general term that could apply to more than climate change.
The document also broadly warns investors that "legislation, regulations and court decisions or other government actions" could harm business. The word "environmental" appears once in the 205-page filing.
Announcing a resolution between his office and Peabody, New York Attorney General Eric Schneiderman (D) said Nov. 9 that Peabody misled the public and investors about how climate change and regulation to curb emissions could affect the company — behavior that violated state laws.
The company, for example, predicted that "aggressive" regulations for existing power plants and electric generation in the United States could cut into its coal sales by 33 percent or more but kept that information private, according to the attorney general’s office.
As part of the November agreement, Schneiderman said Peabody would file new SEC disclosures that "accurately and objectively represent" climate risks.
"Peabody has agreed that all future statements to shareholders and the public will be consistent with the terms of its agreement with the attorney general’s office and the disclosures it will file with the SEC," Schneiderman’s office said in November.
Company defends ‘routine’ document
Asked why the document detailing the sale of $1 billion in securities did not mention climate change and related financial risks, a Peabody spokesman issued the following response to ClimateWire: "The shelf statement is a routine filing and replaces a prior shelf statement that expired in October. It incorporates by reference other filings such as the latest quarterly 10Q." (A shelf statement is a financial technique that lets public companies offer securities "off the shelf" to investors.)
Schneiderman said the investigation that resulted in the recent resolution began in 2013.
That investigation found Peabody had been including an International Energy Agency forecast in its investor guidance favorable to coal demand, while omitting two other IEA scenarios that forecast a far bleaker future for global coal consumption.
That forecast was "based on an assumption that governments will fail to adopt any new policies or regulations to reduce the amount of climate change pollution."
In June 2007, when Gov. Andrew Cuomo (D) was state attorney general, his office subpoenaed Peabody for information about the firm’s "disclosure to investors of risks associated with possible climate change and related legislation and regulations," according to Peabody.
"Concerns about the environmental impacts of coal combustion" and increased coal regulation, Peabody said Feb. 25, "could significantly affect demand for our products and securities."
Following the Paris climate accord reached during the weekend, Peabody shares finished the day down 13 percent at $7.66.
Clarification: While Peabody’s 205-page filing made no mention to potential investors of its legal and financial risks involving climate change, it did reference other documents that disclose them in line with the company’s recent settlement with New York state’s attorney general.
