Facebook says 2021 ‘polar vortex’ brought higher energy costs
Facebook CEO Mark Zuckerberg, testifies before Congress during the U.S. House Financial Services Committee’s An Examination of Facebook and it’s Impact on Financial Services Sectors hearing. This was held in Washington, DC on October 23, 2019.
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Facebook became parent after a blast of cold air hit the U.S. Meta PlatformsThe social media platform said that they are slightly less profitable in a recent document. This is a rare example of a company disclosing financial effects of severe weather. It also ties in with an effort by the Securities and Exchange Commission (SEC) to require companies to evaluate climate-related risks.
Gary Gensler (SEC Chair) is here to help investors learn more about the risks that climate change can pose. said last JulyHe has also asked his staff to create rules for mandatory disclosure. Public companies have been asked more frequently by the SEC to disclose their climate concerns. Wall Street JournalLast week, reported.
After a division asked David Wehner (Meta’s finance chief), in an interview, the disclosure was made. September letterMeta will be able to explain the financial effects of climate change.
Meta was represented by a lawyer six weeks later. respondedThe company claimed that it had not been affected by climate change in any way material. Investors would need to see this statement.
“The company respectfully advises the staff that it regularly monitors its legal exposures and it has not identified any material litigation risks related to climate change that would be required to be disclosed under the applicable disclosure requirements,” the lawyer, Michael Kaplan of New York-based Davis Polk & Wardwell LLP, wrote in the letter, which appeared on the SEC’s website late last week.
SEC will be back next week pushed backThe client claimed Meta did not back up their claims, and requested more information.
One month later Meta repliedThis time it includes an explanation of how it decides whether investors should be notified. Kaplan stated that Meta’s financial organization reviews its quarterly results to determine if any weather events had an impact on them. In a meeting with legal and finance team members, they review all findings. The goal is to identify cases involving events that had an impact on at least $100,000,000, which would be 0.3% of 2020’s net income.
Kaplan stated, “We note that during the review of the first quarter 2021, the finance team of the Company identified that the polar vortex that impacted the United States in Feb 2021 resulted in increased energy costs for approximately just under 1% of our net income for that quarter.”
Meta Platforms reported $9.50 billion in net incomeIn the first quarter 2021, 1% works out at $95 millions.
Polar vortex refers to winds that maintain cold air above the North Pole. These winds can become unstable over time and let the Arctic cold air flow down, causing extreme winter conditions at certain places. While there’s no consensus about whether these are considered climate disasters or not, Paul Ullrich of the University of California Davis is an expert in regional climate modeling.
In this, the polar vortex was a key factor a major winter stormAccording to The Texas Tribune, February 20, 2021 was in Texas. National Weather Service. Facebook’s Fort Worth location houses a data centre. There are others in Alabama and Iowa as well as North Carolina, North Carolina, Ohio Oregon, New Mexico, Utah, Virginia, Nebraska, North Carolina, North Carolina, North Carolina, North Carolina, North Carolina, Ohio.
Kaplan stated that although the polar vortex did not have a material impact on Meta’s results but the company had updated its risk factors.
The company stated that it was also subject to higher energy costs or other expenses to keep our products available or performing in relation to any of these events. quarterly earnings statementOn file at the SEC