Investors ask U.S. SEC for more ESG disclosures as companies resist

Investor groups have asked the U.S. Securities and Exchange Commission for more corporate disclosures on climate change and other environmental, social and governance (ESG) issues while business interests have pushed back, a Reuters review of correspondence published by the regulator shows.

Reuters reported on 16 June 2021:

The deadline for the public to submit comments to the SEC on the topic expired on Monday 14 June. Thousands of investors and advocates, from large asset managers to individual investors, as well as companies and trade groups made submissions, which were accessible on the SEC website.

The SEC said last week it may propose new rules on ESG disclosures in October. Such a move would mark a big change under new SEC chair Gary Gensler, who was nominated by President Joe Biden as part of a broader push to tackle climate change and social injustice.

“The current state of climate change disclosure does not meet our needs,” Ceres, a Boston-based coalition of more than 500 investors, environmental organizations and public-interest groups, said in one of the letters.

The group called on the SEC to take a broad view of the impact of climate change, including the implications for human rights and the connection between climate, water, food and forests.

Companies and corporate lobby groups including trade groups for petroleum producers and banks, on the other hand, urged the SEC to give them broad discretion in their ESG disclosures. They argued one-size-fits-all requirements do not work in practice. Companies themselves are best placed to assess which information is the most important or material for their investors, they said.

“Disclosure mandates should not be prescriptive, but rather should continue to be flexible so that disclosures respond to changes in facts, circumstances, risks and other developments,” wrote Tom Quaadman, an executive vice president at the U.S. Chamber of Commerce.

The United States has no specific climate disclosure rules. It also has not agreed on definitions for key terms such as sustainable and has no uniform standards for measuring corporate environmental goals or quantifying and reporting climate risks, although many companies make ESG disclosures under a range of voluntary standards.

The full article may be found here.

Published 18 June, 2021