To Disclose or Not … is Not the Question
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ESG is at the forefront of contention at the SEC. Differences between Republican and Democratic commissioners are sharp and clear.
The Republican commissioners object to “broad disclosure mandates” because they are too “malleable” and lacking in clear definition of what is an acceptable ESG asset. This is the same core objection Democrats have expressed with Reg BI.
But the SEC’s efforts to address ESG continue.
In his March 2 Senate confirmation hearing, President Biden’s nominee for SEC Chair, Gary Gensler, supported strengthening disclosure of climate factors and ESG.
Acting SEC Chair, Allison Herren Lee, had already started acting. She announced in late February the SEC Corporate Finance Division would, “enhance its focus on climate-related disclosure” in public company filings. An SEC enforcement task force on ESG has been announced and Lee requested comments on March 15.
According to Investment News, the SEC is, “taking a “holistic look” at all the ways climate and ESG intersect with regulatory efforts across its divisions. Lee said, “It’s all hands on deck.”
Republican Commissioners Hester Peirce and Elad Roisan raised numerous questions about these initiatives in early March. They singled out corporate finance and company ESG disclosures. They stressed the importance of disclosure of “material” facts. According to Pierce and Roisan, “All the (finance) division’s work has been rooted in materiality, the touchstone we use in assessing issuer disclosure on all topics, including climate.”