Climate Change, West Virginia v. EPA, and the SEC’s Distinctive Statutory Mandate

In March 2022, the Securities and Exchange Commission (SEC) proposed a rule that would require publicly traded companies to provide investors with various climate-related disclosures (the Proposal).[1]The rule has generated extensive debate and the SEC has received more than 4,000 substantive comment letters and more than 10,000 form letters to date. Commenters have raised a variety of concerns about the Proposal, including the extent to which the SEC has the authority to mandate climate-related disclosure. Since the Supreme Court’s June 2022 ruling in West Virginia v. EPA, some commentators have also asserted that the Proposal runs afoul … Read more

The “S” in ESG: Human Capital Management

Over the past decade, ESG has morphed from a fringe concern into one of the most prominent topics in corporate governance – and a flourishing research area as well.[1] Nevertheless, some notable blindspots remain. Based on a recent survey, the vast majority of legal ESG scholarship limits the analysis to just two ESG factors: (1) climate risk, and (2) corporate diversity. These are hugely important issues, but a close look at developments on the ground reveals that there is a lot more to ESG. As it is practiced today, ESG also covers a wide range of matters related to … Read more

The Breakdown of the Public–Private Divide in Securities Law

Securities law in the United States has traditionally been designed around a set of lines – the “public–private divide” – which separate public companies, public capital, and public markets from private companies, private capital, and private markets. Until the early 2000s, the lines were successful in establishing two largely coherent legal realms – a highly regulated public realm and a lightly regulated private realm – with investor protection by way of disclosure and governance obligations limited to the public realm. A series of bold and often-inconsistent reforms, however, has transformed this longstanding regime into a low-friction system where public capital … Read more

Securities Disclosure As Soundbite: The Case of CEO Pay Ratios

Since 2018, U.S. public companies have had to calculate and report a new, unconventional statistic—a CEO pay ratio—which links CEO pay to the pay of rank-and-file workers. Based on a last-minute addition to the Dodd-Frank Act of 2010, the disclosure requirement generated significant controversy during the lengthy SEC rulemaking process. Companies and their executive compensation consultants spent years and considerable resources preparing to comply with the rule. Once the pay ratio figures started arriving in 2018, they captured public imagination in ways that the typically long and technical corporate disclosure documents never do. The sizeable pay gaps highlighted by the … Read more