Issues to Consider before Mandating ESG Disclosures through Securities Regulation

By Hans B. Christensen November 4, 2022 by renholding

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 …

Davis Polk Discusses New SEC Rules on Fund Shareholder Reports

By Gregory S. Rowland, Michael S. Hong, Sarah E. Kim, Leor Landa and Matthew R. Silver November 3, 2022 by renholding

On October 26, 2022, the Securities and Exchange Commission (SEC) adopted new rule and form amendments (the Amendments) that require mutual funds and exchange-traded funds to (i) transmit annual and semi-annual shareholder reports that highlight certain key information such as …

How to Improve Disclosure and Promote Better Corporate Governance in Public Companies

By Jennifer O’Hare October 28, 2022 by renholding

Corporate governance guidelines (“CGGs”) are a relatively recent addition to the corporate governance framework of public companies. In 2003, in response to accounting scandals at Enron Corporation and several other large public companies, the NYSE created rules to improve the …

When Disclosure Isn’t Enough: Evidence on Cursedness in Betting Markets

By Darren Bernard, Madi Kapparov, Sara Toynbee and John Wertz October 26, 2022 by renholding

Capital market regulation often relies on two methods: imposing restrictions on the actions of parties with private information and requiring greater transparency about these actions. The U.S. Securities and Exchange Commission’s (SEC) recent proposal targeting insider trading abuses follows this …

The Real Impact of Voluntary ESG Disclosure Standards

By Khrystyna Bochkay, Seungju Choi and Jeffrey Hales August 15, 2022 by renholding

Despite the dramatic increase in corporate-sustainability disclosure in recent years, the absence of uniform reporting standards has prompted concern among investors and companies and led to inconsistent disclosure practices, deceptive green marketing, and a lack of useful information. To better …

Why Do Institutional Investors Request Climate-Related Disclosures?

By Shira Cohen, Igor Kadach and Gaizka Ormazabal July 20, 2022 by renholding

An important debate is playing out over the role of institutional investors in the global effort to mitigate climate risk and achieve net-zero emissions. While some believe that institutional investors are sufficient catalysts in preparing us for a low carbon …

Issuer Liability: Ownership Structure and the Circularity Debate

By Martin Gelter July 6, 2022 by renholding

In many countries, investors can hold publicly traded companies liable for public misstatements. Issuer liability is intuitively appealing because statements are generally made on behalf of the company by its representatives. Moreover, large companies typically have deep pockets, which ensures …

Reimagining Board Committees to Accommodate Worker Voice

By Douglas K. Chia July 5, 2022 by renholding

Employees at U.S. public corporations have increasingly demanded that their concerns be heard at the very senior levels of management. If current trends continue, boards of directors could also be challenged to accommodate “worker voice” more formally. Rather than being …

The Pros and Cons of Disclosing News in Distressed Organizations

By Hrishikesh Desai and Daniel Schaupp July 1, 2022 by renholding

Regulation affecting managers’ disclosure of news in U.S. organizations has been affected by three main changes over the past three decades: (a) The Private Securities Litigation Reform (PSLR) Act, 1995, which protected managers from litigation arising from the disclosure of …

Do Investor Reactions Differ Across the Lifecycle of ESG Initiatives?

By Shannon Garavaglia, Ben W. Van Landuyt, Brian J. White and Julie R. Irwin June 14, 2022 by renholding

Firms often take on environmental, social, and governance (ESG) initiatives to increase their sustainability and the positive feelings among investors. However, specific ESG initiatives, like all business initiatives, rarely continue indefinitely, and “pruning” them is an integral part of firms’ …

SEC Chair Gensler on ESG Disclosures Proposal

By Gary Gensler May 27, 2022 by renholding

Today [May 25], the Commission is considering a proposal to improve disclosures by certain investment advisers and funds that purport to take Environmental, Social, and Governance (ESG) factors into consideration when making investing decisions. I am pleased to support this

…

Katten Discusses Shareholder Litigation Risk in an Unstable Geopolitical Environment

By Richard Zelichov and Trevor T. Garmey May 26, 2022 by renholding

Over the past two years, U.S. public companies faced an unpredictable risk environment. Two geopolitical crises – the Covid-19 pandemic, and the Russian invasion of Ukraine – strained international supply chains and destabilized financial markets.

It is tempting to view …

How Mandatory Corporate CSR Disclosures Affect Investors

By Kirsten Fanning, Richard C. Hatfield and Chez Sealy May 24, 2022 by renholding

Investment in companies that engage in sustainable corporate practices is growing rapidly, with those companies receiving approximately $17 trillion from investors so far in the United States alone. As a result, the majority of public companies now voluntarily disclose environmental, …

Debevoise & Plimpton Discusses SEC Guidance on Ukraine Disclosure Obligations

By Satish M. Kini, Paul M. Rodel, James C. Scoville, Robert T. Dura and Isabel Espinosa de los Reyes May 16, 2022 by renholding

On May 3, 2022, the Division of Corporation Finance (“CorpFin”) of the U.S. Securities and Exchange Commission (“SEC”) provided guidance to companies of their disclosure obligations with respect to the direct or indirect impact that Russia’s invasion of Ukraine and …

SEC Chair Gensler Talks Security-Based Swaps Market to ISDA

By Gary Gensler May 12, 2022 by renholding

Thank you for the kind introduction. It’s good to be back with the International Swaps and Derivatives Association (ISDA) again.

As is customary, I’d like to note that I’m not speaking on behalf of my fellow Commissioners or the SEC

…

Does Going Private Affect Peer Firms’ Disclosures?

By Lisa A. Hinson and Jeffery Piao May 11, 2022 by renholding

Disclosure by publicly listed companies provides critical information to the capital markets and benefits not only firms’ stakeholders but also the overall economy (e.g., Badertscher et al. 2013; Shroff et al. 2017; Barrios et al. 2021). However, the number of …

How Takeovers Affect Firms’ Voluntary Disclosure

By Rahul Menon May 2, 2022 by renholding

How does the possibility of being taken over affect the disclosure of information by the management of the target firm? This has been a question of considerable interest in the accounting and finance literature because transparency is very important for …

How Disclosure and Information Intermediaries Strengthen the Credibility of Initial Coin Offerings

By Thomas Bourveau, Atif Ellahie, Emmanuel T. De George and Daniele Macciocchi April 27, 2022 by renholding

The crypto-tokens market has recently emerged as an alternative source of financing for entrepreneurial ventures, with approximately $27 billion raised globally through March 2022.[1] These ventures issue blockchain-based digital “crypto-tokens” to raise external capital through an initial coin offering …

Sullivan & Cromwell Discusses the Implications for Financial Institutions of Proposed SEC Climate Disclosure Rules

By Michelle Chen, Marc Trevino, Rod Gilman, June Hu and Aaron Levine April 22, 2022 by renholding

On March 21, 2022, the Securities and Exchange Commission proposed, in a 510-page release, climate-related disclosure rules for public companies. Although the proposed rules do not impose industry-specific requirements, in certain areas they would have a particularly significantly impact …

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