A recent policy innovation is the use of securities regulations to solve social challenges. It started with mine-labor-safety and conflict-minerals disclosures in the 2010 Dodd-Frank Act and continues today with the Securities and Exchange Commission (SEC) proposal to mandate climate change disclosures. The ostensive goal is to protect investors but, most likely, the real objective is to affect social change on issues where more traditional policy instruments lack sufficient political support in Congress.

No doubt, the safety of miners, the financing of wars through international mineral trade, and global warming are important issues worthy of the government’s attention. The question, … Read more