Unpacking the SEC’s Climate-Related Disclosures: A Quick Tour of the Issues

By John C. Coffee, Jr. March 29, 2022 by renholding

[Editor’s Note: We present this and the following two pieces as a symposium on the U.S. Securities and Exchange Commission’s proposed climate-disclosure rules released on March 21, 2022.]

After a considerable delay, the SEC finally told us last week in …

Is Now the Right Time to Mandate Costly Climate Disclosure?

By Charles K. Whitehead March 29, 2022 by renholding

In August 2021, the United Nations Intergovernmental Panel on Climate Change (“IPCC”) found that “unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to [the Paris Agreement’s goal of] 1.5°C or even 2°C …

Will It Float?: The Legitimacy of the SEC’s Authority for Climate Risk Disclosures

By James D. Cox March 29, 2022 by renholding

On March 21, 2022, the SEC formally launched one of the most significant initiatives ever taken in its nearly 90-year history: proposals for disclosure of climate-related risks. (SEC, The Enhancement and Standardization of Climate-Related Disclosures for Investors. Sec. Act. Rel. …

SEC Chair Gensler on Proposed Mandatory Climate Risk Disclosures

By Gary Gensler March 22, 2022 by renholding

Today [March 21], the Commission is considering a proposal to mandate climate-risk disclosures by public companies. I am pleased to support today’s proposal because, if adopted, it would provide investors with consistent, comparable, and decision-useful information for making their investment

…

SEC Commissioner Peirce Criticizes Proposed Mandatory Climate Risk Disclosures

By Hester M. Peirce March 22, 2022 by renholding

Thank you, Chair Gensler. Many people have awaited this day with eager anticipation. I am not one of them. Contrary to the hopes of the eager anticipators, the proposal will not bring consistency, comparability, and reliability to company climate disclosures.

…

Skadden Discusses DOJ’s White Collar Crime Enforcement Priorities

By Gary DiBianco, Andrew M. Good, Ryan D. Junck, Jessie K. Liu and David Meister March 18, 2022 by renholding

Remarks made by U.S. Department of Justice (DOJ) officials at the March 2022 American Bar Association’s (ABA’s) National Institute on White Collar Crime (the White Collar Conference) reflect the DOJ’s prioritizing white collar criminal enforcement under the Biden administration.1

On …

The “S” in ESG: Human Capital Management

By George S. Georgiev March 16, 2022 by renholding

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, …

Stakeholder Capitalism as ESG-Constrained Shareholder Capitalism

By Peter H. Huang March 11, 2022 by renholding

Intense debates are alive and well on the nature and meaning of corporate purpose and corporate personhood. In a new paper, I analyze proposals by the U.S. Securities Exchange Commission to require that all reporting companies make periodic, mandatory …

Skadden Discusses New Pressure on Companies to Disclose Political Policies and Contributions

By Ki P. Hong, Melissa L. Miles and Karina Bakhshi-Azar February 28, 2022 by renholding

Political activities of corporations are increasingly subject to scrutiny on environmental, social and governance (ESG) grounds. Demands that corporations and their political action committees (PACs) justify their contributions based on candidates’ voting records on ESG issues came to the fore …

What ESG-Related Disclosures Should the SEC Mandate?

By Jonathan M. Karpoff, Robert Litan, Catherine M. Schrand and Roman L. Weil February 9, 2022 by renholding

The Financial Economist Roundtable (“FER”) met in July 2021 to discuss current efforts to measure and require disclosure of firms’ ESG activities.[1] The views of individual FER members about specific issues often differ, but the consensus was that financial …

ISS Reviews ESG Equity Indices in 2021

By Hernando Cortina January 28, 2022 by renholding

With some exceptions, 2021 was a generally strong year for equity markets around the world. Impressively, passive ESG products such as ETFs garnered significant inflows of over $150 billion dollars and saw asset under management growth of over 80% globally.

…

Climate-Risk Disclosures and “Dirty Energy” Transfers: “Progress” Through Evasion

By John C. Coffee, Jr. January 25, 2022 by renholding

At first glance, recent progress towards transparency in corporate climate-risk disclosures seems exceptional. Over 2,000 companies now publish annual reports showing their carbon emissions data (although most self-interestedly omit Scope 3 data). Many (including most recently ExxonMobil) have made a …

Wachtell Lipton Discusses Investor Priorities in 2022

By Andrew R. Brownstein, Steven A. Rosenblum, Sabastian V. Niles and Carmen X.W. Lu January 25, 2022 by renholding

Last year, major investors took unprecedented steps through engagement efforts and proxy voting to demonstrate their commitment to addressing the climate transition and board and workforce diversity and inclusion, with focus given to disclosure and reporting of key ESG metrics …

Reputation and Sustainability: Opportunities for Growth in Emerging Markets

By Dale Herndon and Richard Baskerville January 21, 2022 by renholding

We are witnessing a shift in global economic activity from advanced markets to emerging ones. According to the World Bank Group (2021) Global Economic Prospects report, emerging markets and developing economies (EMDEs) have experienced higher real gross domestic product (GDP) …

Larry Fink’s 2022 Letter to CEOs

By Larry Fink January 20, 2022 by renholding

Dear CEO,

Each year I make it a priority to write to you on behalf of BlackRock’s clients, who are shareholders in your company. The majority of our clients are investing to finance retirement. Their time horizons can span decades.

…

Cleary Gottlieb on Navigating a World Where Almost Everyone Is an Activist

By James E. Langston, Kyle A. Harris and Claire Schupmann January 19, 2022 by renholding

In many ways, 2021 was a high-water mark for corporate activism. The levels of traditional shareholder activism rebounded from the lows reached during the early days of the COVID-19 pandemic. M&A activism increased substantially as shareholder activists sought to capitalize …

Financing Sustainable Entrepreneurship

By Paul P. Momtaz and Sasan Mansouri January 13, 2022 by renholding

At least since BlackRock boss Larry Fink’s annual letter to CEOs in 2019, investing in ESG assets has become a major topic among both retail and institutional investors. In a new article, we address the question of how economically attractive …

Wachtell Lipton Discusses Compensation Season 2022

By Jeannemarie O’Brien, Andrea K. Wahlquist, Adam J. Shapiro, David E. Kahan, Michael J. Schobel and Erica E. Bonnett January 11, 2022 by renholding

U.S. companies continue to demonstrate resilience following another year in which the pandemic imposed itself on world events. Although 2021 did not deliver a full reopening, corporate activity thrived in spite of ongoing uncertainty around “return to work,” building on …

Heightened Eligibility Thresholds for Shareholder Proposals: Modernization or Voter Suppression?

By Xinyi Mao December 17, 2021 by renholding

In September 2020, the Securities and Exchange Commission amended Rule 14a-8 of the Securities Exchange Act to increase the eligibility requirements for a shareholder to submit proposals.[1] Rule 14a-8, also called the shareholder proposal rule, governs when a company …

Mandatory vs. Voluntary ESG Disclosure, Efficiency, and Real Effects

By Cyrus Aghamolla and Byeong-Je An December 8, 2021 by renholding

In recent years, several countries have imposed disclosure requirements on public firms for environmental, social, and governance (ESG) performance. These mandates have also been accompanied by the European Union’s wide-reaching Non-Financial Reporting Directive, effective in 2018 (Directive 2014/95/EU). Similar legislative …

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