The Democratic-led Securities and Exchange Commission is expected to issue rules on whether to require public companies to disclose risks associated with climate change, an action that should serve as a wake-up call for small-business owners, retail investors, and state treasurers in red states.

If the SEC has its way, public companies will have to disclose any risks they pose to the climate, providing ammunition to numerous financial companies, credit rating agencies, asset managers, proxy advisers, and others. If the company is not doing “enough” for the environment, its credit rating would be docked, and it would become more costly to operate. All businesses would face the real choice between spending capital on nonessential items to appease the climate gods or paying increased borrowing costs resulting from a downgraded credit rating.