Katie DeLuca Quoted on SEC Environmental, Social and Governance Rulemaking

July 29, 2021

A 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.”

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