SEC official says ESG disclosure policy must be ‘adaptive,’ ‘innovative’
The agency must be nimble in keeping up with an increasingly popular and rapidly evolving issue.
March 12, 2021 2 MINS
A Securities and Exchange Commission official said the agency must establish environmental, social and governance disclosure policy that is “innovative” and can keep up as the increasingly popular investing area evolves.
“An effective ESG disclosure system does not imply a rigid and soon-to-be outdated set of limited disclosures,’ John Coates, acting director of the SEC’s Division of Corporation Finance, said in a statement Thursday. “It means thoughtful engagement by trusted specialists seeking consensus among investors and companies about useful, reliable and comparable disclosures under standards flexible enough to remain relevant.”
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A flurry of recent climate-related announcements from the SEC forecasts an upcoming policy battle at the agency. Acting Chair Allison Herren Lee has signaled that “ESG” will clearly be in focus across the SEC’s various divisions, including Examinations, Corporation Finance, and Enforcement. Presumptive incoming SEC Chairman Gary Gensler also indicated during his March 2, 2021 Senate confirmation hearing that ESG considerations would be on his radar when setting his agenda. But Commissioners Peirce and Roisman issued their own statement in which they question (in a rather sardonic manner) whether the announcements “raise more questions than they answer.”
New SEC Enforcement Task Force Targets Environmental, Social, and Governance Issues | Faegre Drinker Biddle & Reath LLP jdsupra.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from jdsupra.com Daily Mail and Mail on Sunday newspapers.
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Over the past few weeks, the U.S. Securities and Exchange Commission has taken several actions that put climate change front and center, reflecting the importance to many investors of climate change related disclosures.
In early February, the SEC announced the addition of Satyam Khanna as a senior policy advisor charged with coordinating and overseeing efforts related to climate and other environmental, social, and governance (ESG) issues. Mr. Khanna is the first-ever senior policy advisor for ESG issues at the SEC. Since then, the SEC has announced a rapid series of additional initiatives.