SEC Chairman Gensler Defends Proposed Climate Disclosures – Corporate/Commercial Law & More News Here – Upjobsnews

SEC Chairman Gensler delivered a set of prepared remarks at the
Ceres Investor Briefing on April 12, 2022, in which he defended the
SEC’s newly proposed rule concerning climate
disclosures. 

As expected, Chairman Gensler’s defense of the proposal
highlighted how these rules were situated in “the context of
[the SEC’s] long tradition of disclosures,” including the
“disclosure of risk factors” from the 1960s and “the
SEC’s guidance from 2010 regarding climate-related
disclosures.”  Chairman Gensler further noted that
“[c]limate[] disclosures are already 
happening,” and that “the SEC has a role to play in terms
of bringing some standardization to the conversation happening
between issuers and investors, particularly when it comes to
disclosures that are material to investors.”  In effect,
Chairman Gensler justified this new proposal of climate disclosures
by attempting to situate it within a longstanding tradition of
required disclosures, and that the SEC is only stepping in to
provide a standard set of disclosures that would provide
“consistent, comparable, and decision-useful information”
about a topic that is already the subject of investor
interest. 

Notably, Chairman Gensler did not directly address one of the
most frequent criticisms of these new proposed disclosures–namely,
that the SEC is mandating disclosures about an issue that is beyond
its proper purview, which is limited to the financial markets.
 Although Chairman Gensler addressed this criticism
implicitly–by, among other things, noting the significant investor
demand for such climate disclosures–he did not offer a
full-throated defense of why climate disclosures should be
considered relevant.  This is especially noteworthy when
considering the considerable pushback from industry and certain
investors that climate disclosures, or ESG issues generally, are
not a proper subject for disclosures.  In essence, the
rationale used by Chairman Gensler–that this proposal is linked to
investor demand for such disclosures–runs the risk of eroding if
public opinion shifts against such measures.  Such a
development is far from impossible, given shifting political
currents.  

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