The SEC previously had publicly announced that it is considering the promulgation of new regulations concerning ESG disclosures, and sought public comment on climate change disclosures.
However, one of the Republican SEC Commissioners has now publicly questioned whether ESG disclosures, including ones focused on climate change, are an appropriate subject matter for the SEC. Specifically, Commissioner Pierce expressed "worry about the implications [of] a stakeholder-focused disclosure regime" and "the additional of specific ESG metrics," stating that "[s]uch a regime would likely expand the jurisdictional reach of the Commission, impose new costs on public companies, decrease the attractiveness of our capital markets, distort the allocation of capital, and undermine the role of shareholders in corporate governance."
Although Commissioner Pierce is in the minority during the Biden Administration, her expressed views likely reflect the substantial pushback that the SEC will encounter as it seeks to devise and implement new ESG disclosures, including ones focused on climate change.
In the United States, the idea of enlisting the securities laws to achieve ESG objectives is gaining traction among activists and policy elites with a particular emphasis on requiring disclosure of specific ESG metrics. Some are urging us to closely align our rules with our European friends who long have been working on devising a comprehensive set of ESG disclosure metrics. Others would like to see us rely on standards developed and governed by an international body, such as the work being contemplated by the International Financial Reporting Standards Foundation. Indeed, there is mounting pressure to embrace a single global set of metrics, which would facilitate international capital flows and issuers’ reporting obligations.
https://www.sec.gov/news/public-statement/rethinking-global-esg-metrics
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