Elections have consequences, as they say, and one of those consequences is new leadership at the SEC who bring with them a markedly different agenda. In remarks yesterday to the Center for American Progress, entitled A Climate for Change: Meeting Investor Demand for Climate and ESG Information at the SEC, Acting SEC Chair Allison Lee provided important insights into where the SEC is headed with regard to environmental, social and governance issues. As Lee confirmed in the introduction to her speech, “no single issue has been more pressing for [her] than ensuring that the SEC is fully engaged in confronting the risks and opportunities that climate and ESG pose for investors, our financial system, and our economy.” Investors are not getting the information they need, and that’s why the SEC has “begun to take critical steps toward a comprehensive ESG disclosure framework.” In addition, she has directed Corp Fin to revisit the shareholder proposal process and is also considering whether the SEC should establish a dedicated ESG standard setter. According to Lee, “climate and ESG are front and center for the SEC.”
It’s not just mandatory climate disclosure that’s on the agenda for Acting SEC Chair Allison Lee. Last week, as reported by Reuters, in remarks to a forum for securities industry professionals, she said that the SEC “should think more ‘creatively and broadly’ about tackling issues of race and gender diversity, including by potentially revisiting public companies’ disclosure requirements.” In the past, Lee has not hesitated to emphasize her concerns about the absence of prescriptive requirements in rulemakings that would have more certainly elicited disclosure regarding diversity. (See, for example, her statement regarding amendments to Reg S-K as well as her remarks to the Council of Institutional Investors, Diversity Matters, Disclosure Works, and the SEC Can Do More.) Now that she has directed Corp Fin to focus on climate disclosure, will diversity be next?