ESG-related issues are a tip-top priority for the Commission under Chairman Gary Gensler’s leadership. Specifically, the Commission’s Examination and Enforcement divisions continue to look for greenwashing and other types of inaccurate or unverifiable statements and disclosures relating to environmental (e.g., climate change), social (e.g., diversity and inclusion, human capital supply chain) and governance (e.g., cybersecurity) related issues.
Additionally, in his testimony before the U.S. House of Representatives Committee on Financial Services on October 5, 2021, Chairman Gensler explained that issuers will soon be required to provide investors (and their investment professionals) with “consistent, comparable, and decision-useful ESG-related disclosures.” Consistent with this statement, the Commission’s 2021 RegFlex agenda includes six proposed rulemakings relating to disclosures (mostly by issuers), which are set out in the table below:
Title
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Status and Explanation
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Link
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Corporate Board Diversity
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The SEC’s Division of Corporation Finance is considering recommending that the SEC propose rule amendments to enhance registrant disclosures about the diversity of board members and nominees.
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3235-AL91
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Disclosure of Payments by Resource Extraction Issuers
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The SEC’s Division of Corporation Finance is considering recommending that the SEC review the rules under Section 1504 of the Dodd-Frank Act to determine if additional amendments might be appropriate.
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3235-AM06
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Climate Change Disclosure
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The SEC’s Division of Corporation Finance is considering recommending that the SEC propose rule amendments to enhance registrant disclosures regarding issuers’ climate-related risks and opportunities.
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3235-AM87
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Human Capital Management Disclosure
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An SEC division is considering recommending that the SEC propose rule amendments to enhance registrant disclosures regarding human capital management.
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3235-AM88
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Cybersecurity Risk Governance
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The SEC’s Division of Corporation Finance is considering recommending that the SEC propose rule amendments to enhance issuer disclosures regarding cybersecurity risk governance.
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3235-AM89
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Rules Related to Investment Companies and Investment Advisers to Address Matters Relating to Environmental, Social and Governance Factors
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The SEC’s Division of Investment Management is considering recommending that the SEC propose requirements for investment companies and investment advisers related to ESG factors, including ESG claims and related disclosures.
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3235-AM96
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As noted in our recent blog post, SEC Expands Focus on ESG-Related Products, we recommend that SEC registrants monitor new ESG-related guidance and news as it is published by the SEC, including the proposed rulemakings described above, and to examine their own policies, procedures, and practices to ensure that they are consistent with such guidance.