July 21, 2021, Investment News article quoting McGuireWoods Richmond partner
Katie DeLuca examined recent comments by Commissioner Hester Peirce of the U.S.
Securities and Exchange Commission regarding challenges facing the SEC as
it moves toward mandatory environmental, social and governance (ESG)
disclosures by public companies. These comments pointed to a split at the
SEC about the oversight of sustainable investing.
According to the article, some commissioners see enhancing ESG disclosures
as a demand from investors who increasingly are allocating assets to funds
that use ESG factors. Other commissioners warn that ESG rulemaking cannot
establish agreed-upon models, methodologies and metrics; that many ESG
factors don’t materially affect financial results; and that they are
inherently political, putting the SEC on a slippery slope.
“It’s hard to imagine there will be consensus given how far apart the
different commissioners’ viewpoints are on this topic,” said DeLuca. “I
think this is such a high priority for the administration, they’ll push it
through with a lack of consensus. I would not be surprised if we’ll see
proposed rules by their deadlines.”