The Securities & Exchange Commission was designed to require public companies to make material disclosures for investors. Although SEC filings are known for dense and daunting legalese, those filings are a major tool to help investors perform in-depth analysis.

However, the SEC has been slow to implement climate change disclosure, which has been in the works for years. Although more and more companies are addressing sustainability and climate change, many still lag on revealing the information investors really need to know: the potential for related financial and business impacts.

For those investors who don't feel this is an important factor, consider that the topic relates to risks and opportunities. Strong SEC disclosure rules would push public companies that are ignoring the ramifications to address the topic, and they would also standardize the information to help investors make more informed decisions.

Hot-button issue gets a cool-down
Ceres, a nonprofit organization that seeks to drive business and investor leadership on climate change, water scarcity, and other sustainability challenges, has released a report called "Cool Response: The SEC and Corporate Climate Change Reporting: SEC Climate Guidance & S&P 500 Reporting: 2010-2013" (download the full report here).

Extreme weather events, resource scarcity, and other changes can impact many industries, including insurance, oil and gas, transportation, agriculture, and many more. For investors with a close eye on public companies and their own investments over the long term, we can glean two things:

  • Companies that aren't addressing these issues will be slammed with costs, including physical damage and dwindling key resources.
  • Companies that are aware and prepared will reduce costs by preserving resources for their businesses through innovative means.

Responsibility in oil and gas
Although many companies discuss environmental initiatives in their annual corporate social-responsibility reports, it's rarely as robust a discussion as it could be.

The oil and gas industry doesn't have a great reputation among socially conscious investors. However, Ceres noted that the oil and gas industry actually has the best response rate on the topic in their form 10-Ks.

Noble Energy (NBL) provided the most detailed disclosure on climate change and its business ramifications. Noble Energy's climate change disclosure in its latest Form 10-K is about 1,200 words -- that's longer than this column.

Much of Noble Energy's disclosure focuses on risks. However, here's an interesting nugget from the filing that bears noticing: "In terms of opportunities, the regulation of GHGs and introduction of formal technology incentives, such as enhanced oil recovery, carbon sequestration and low carbon fuel standards, could benefit us in a variety of ways."

The risks related to crude oil, nuclear power, and the possible increase in renewable energy that would likely need backup to maintain electricity supply, and the need for alternative transportation fuels would all positively benefit its natural gas business, which represented 54% of its total sales volumes from operations in 2012.

Stealth sustainability
Ceres' report called out Lockheed Martin (LMT -0.20%) as lacking much discussion on climate change in its Form 10-K, with just three lines addressing the issue. This is odd, as Lockheed has plenty of interesting "green initiatives," and the Carbon Disclosure Initiative named Lockheed one of the top companies among 56 it surveyed in addressing climate change in its operations.

Through its "Go Green" goals, Lockheed Martin generated $20.6 million in reinvestment opportunities through its work cutting energy and water use, and it has established more aggressive goals for 2020, including more cuts in carbon emissions and the amounts of waste to landfills and use of water.

It's interesting that while Lockheed appears to be strongly tackling the issue, it hasn't done much to disclose climate change's impacts in its Form 10-K.

A noble stock idea?
Given the SEC's "cool response" to climate change disclosure, as Ceres points out, it's not surprising that 41% of S&P 500 companies didn't mention climate change at all in their Form 10-K annual reports last year. The SEC's limited efforts don't exactly push companies to push forward in this area.

However, although the concept of increased regulation of any kind spooks many people, 100 institutional investors representing $7.6 trillion in assets have supported guidance for such disclosures. This is not exactly a fringe concern.

There's no perfect in investing in companies taking sustainability and social issues into serious account. Few companies have designed themselves to boost sales and profits by hitting on all cylinders on concerns like these.

If one is interested in investing in the oil and gas industry, Noble Energy's particular style here makes it an interesting candidate for further analysis. Its management has obviously been thinking long and hard about this issue, and analyzing at length both the risks and the opportunities. This signals a management team that has a big-picture, strategic view -- and could serve as inspiration for others in its industry and beyond. On the other hand, those who are terribly concerned about the controversial fracking issue should keep that in mind, too.

Regardless, there should be increasing emphasis on giving investors the information to make sure the companies they own are prepared for risks and envisioning the benefits of responsibility. Then investors' portfolios will be prepared -- and growth opportunities will be increased, too.

Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.