Thursday, April 29, 2021

As ESG bandwagon picks up speed, heightened disclosure obligations await just down the road

By Alexandra M. MacLennan, Squire Patton Boggs

With the proliferation of recent ESG related pronouncements and activities at the SEC, including the creation of a Climate and ESG Task Force within the agency’s Division of Enforcement, public issuers and asset managers of all stripes will need to consider how to address enhanced reporting and disclosure obligations that are likely to be issues. The author explores these complex issues and reflects on the ESG phenomena in an article titled The ESG Bandwagon in the United States.

The article notes that despite the newly launched SEC enforcement task force, there is currently no specific securities law or regulation that identifies ESG as a separately identifiable topic with respect to risk disclosure. The article also identifies the two main drivers of the ESG bandwagon: the credit driver who is grounded in the desire for good solid disclosure regarding ESG risks, and the so-called value-based investor who is motivated by sustainable investing in vehicles that are consistent with the investor’s own value system. Finally, the piece considers the disclosure and reporting obligations for those promoting ESG labelled securities compared to those corporations not claiming to promote sustainable concepts.

To read the entire article, click here.