2023 Climate Disclosures in the Russell 3000 and S&P 500

Steve Newman is a Contributing Author at The Conference Board ESG Center in New York. This post relates to a Conference Board research report authored by Mr. Newman and is based on Corporate Environmental Practices in the Russell 3000, S&P 500, and S&P MidCap 400: Live Dashboard, a live online dashboard published by The Conference Board and ESG data analytics firm ESGAUGE. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) by Lucian Bebchuk and Roberto Tallarita; Does Enlightened Shareholder Value add Value (discussed on the Forum here); and Stakeholder Capitalism in the Time of COVID (discussed on the Forum here) both by Lucian Bebchuk, Kobi Kastiel, and Roberto Tallarita; How Twitter Pushed Stakeholders Under The Bus (discussed on the Forum here) by Lucian A. Bebchuk, Kobi Kastiel, and Anna Toniolo; and Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy – A Reply to Professor Rock (discussed on the Forum here) by Leo E. Strine, Jr.

Climate Risk Disclosure Are on the Rise but Remain the Domain of Large Companies and Regulated Industries

Climate risk disclosures increased in 2022 from the previous year, with S&P 500 companies still the most likely to disclose; specifically, 60% of companies in the Russell 3000 Index still did not report climate risk in 2022, compared to only 26% of companies in the S&P 500.


Market Response to Racial Uprisings

Bocar Ba is Assistant Professor of Economics at Duke University, Roman Rivera is a Postdoctoral Scholar at the IRLE at University of California, Berkeley, and Alexander Whitefield is a Ph.D. student of Applied Economics at University of Pennsylvania. This post is based on their recent paper.

In 2020, the Black Lives Matter (BLM) movement gained significant traction in the United States following the killing of George Floyd. The movement, which resulted in the largest sustained protest in U.S. history, sparked numerous debates about the role of policing in the U.S. and how it intersects with systemic racism (New York Times, 2020).  Many in the BLM movement, which popularized the slogan “Defund the Police,” advocate for shifting funds from police departments to non-policing alternatives. In Market Response to Racial Uprisings, we study how such uprisings influence firms with connections to law enforcement. Specifically, do demands for racial justice damage companies that contract heavily with the police? Or does social unrest only amplify demands for policing and increase the profitability of such firms?


2024 Benchmark Policy Guidelines – US

Courteney Keatinge is Senior Director of Environmental, Social & Governance Research at Glass, Lewis & Co. This post is based on her Glass Lewis memorandum.

Guidelines Introduction

Summary of Changes for 2024

Glass Lewis evaluates these guidelines on an ongoing basis and formally updates them on an annual basis. This year we’ve made noteworthy revisions in the following areas, which are summarized below but discussed in greater detail in the relevant section of this document:


Taking Personhood Seriously in Corporate Law

Asaf Raz is a Research Fellow at the University of Pennsylvania Carey Law School. This post is based on his article, forthcoming in the Columbia Business Law Review, and is part of the Delaware law series.

The evolution of corporate law is tied to developments, or often shocks, in the broader social and legal landscape. A well-recognized example is the 1980s hostile takeover era, as summarized by Delaware Chancellor William Allen: “the secure ground upon which the accepted suppositions of corporation law had been premised[, up to the late 1970s, had broken] apart.” Similar “constitutional moments” for corporate law took place with the Citizens United and Hobby Lobby Supreme Court decisions of the previous decade, and with the corporate purpose discussion that re-emerged in mid-2019, and today remains at the forefront of corporate law scholarship and public debate.


SEC Risk Factors Disclosure Analysis

Dean Kingsley is a Principal and Matt Solomon is a Senior Manager at Deloitte & Touche LLP. Kristen Jaconi is an Associate Professor of the Practice in Accounting and Executive Director at Peter Arkley Institute for Risk Management at the USC Marshall School of Business. This post is based on their recent Deloitte report.

Many S&P 500 companies disclosed they have not experienced past material cybersecurity incidents; however, geopolitics and remote work have heightened cybersecurity risk.

The past 12 months have continued to demonstrate significant volatility and uncertainty in the business environment and broader society, including tectonic shifts in disruptive technologies like Generative artificial intelligence (AI), continued economic upheaval, systemic banking risks, complex domestic and global politics, rising workforce activism, ongoing regulatory reform, devastating natural disasters, and the long-term effects of the pandemic. Public companies continue to be challenged to create and protect enterprise value and stakeholder trust in the face of these and other significant risks.

In this context, Deloitte and the USC Marshall School of Business Peter Arkley Institute for Risk Management (USC Marshall Arkley Institute for Risk Management) have conducted their third annual review of risk factor disclosures of Standard & Poor’s (S&P) 500 companies, identifying key trends in the nature and form of these disclosures. This analysis has shown that companies are continuing to report an average of almost 32 risk factors, covering a wide range of risk domains, including strategic transactions, financial, economic, operational, technology, cybersecurity, informational technology, data security, and privacy, legal, regulatory, and compliance, intellectual property, human capital, and market risks. Opportunities remain to better align external risk reporting with internal risk management and reporting processes, improve the readability and categorization of risks, and make disclosures less generic.


SEC Outlines 2024 Examination Priorities

Aaron Gilbride and Marlon Q. Paz are Partners and Naim Culhaci is a Counsel at Latham & Watkins LLP. This post is based on a Latham memorandum by Mr. Gilbride, Mr. Paz, Mr. Culhaci, Laura Ferrell, Jamie Lynn Walter and Stephen P. Wink.

On October 16, 2023, the Securities and Exchange Commission’s (SEC) Division of Examinations (the Division) published its annual examination priorities for 2024 (2024 Priorities), which focus on “certain practices, products, and services that [the Division] believes present potentially heightened risks to investors or the integrity of the U.S. capital markets.” The Division will prioritize areas that pose emerging risks to investors or the markets, as well as examinations of core and perennial risk areas. The 2024 Priorities include certain of these focus areas, but are not an exhaustive list.


Why Have Uninsured Depositors Become De Facto Insured?

Michael Ohlrogge is Associate Professor at NYU School of Law. This post is based on his recent paper.

I. Introduction

The recent failures of Silicon Valley Bank and First Republic have drawn attention to how rare it is for uninsured depositors at a failed bank to bear losses. Over the past 15 years, uninsured depositors have experienced losses in only 6% of US bank failures. In a newly released paper, I show that ubiquitous rescues of uninsured depositors represent a recent phenomenon dating only to 2008: for many years prior to that, uninsured depositor losses were the norm. I also show that the rise of uninsured depositor rescues has coincided with a dramatic increase in FDIC costs of resolving failed banks, which I estimate resulted in at least $45 billion in additional resolution expenses over the past 15 years.


Weekly Roundup: November 24-30, 2023

More from:

This roundup contains a collection of the posts published on the Forum during the week of November 24-30, 2023

California’s Comprehensive Climate Accountability Regime: Setting an Aggressive New National Standard

SEC Adopts Final Rules to Amend Beneficial Ownership Reporting Rules

2023 Annual ESG Preparedness Report

The Delaware-Inspired Next Step Toward Brazil Becoming the South American Leader in Corporate Law: Making Public Company Arbitrations a Matter of Public Record

Law and Political Economy in China: The Role of Law in Corporate Governance and Market Growth

Strengthening pay practices


Earnouts Update 2023

When Bill Rolls Off: Continuity and Change on Corporate Boards

Which ESG proposals won the favor of investors?

Which ESG proposals won the favor of investors?

Miles Rogerson is a Financial Journalist at Diligent Market Intelligence. This post is based on his Diligent memorandum. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here); Does Enlightened Shareholder Value Add Value? (discussed on the Forum here) both by Lucian A. Bebchuk and Roberto Tallarita; How Much Do Investors Care about Social Responsibility? (discussed on the Forum here) by Scott Hirst, Kobi Kastiel, and Tamar Kricheli-Katz; and  Big Three Power, and Why it Matters (discussed on the Forum here) by Lucian A. Bebchuk and Scott Hirst.

A select group of ESG proposals have led the way in terms of shareholder support during the 2023 proxy season. Freedom of association, alongside broader human rights reporting proposals, won occasional majority support from investors in the 2023 proxy season, as shareholders identified employee retention and recruitment as a potential risk resulting from current market volatility.

In a market plagued by rising inflation and cost-of-living concerns, a number of shareholder proposals on pay equity and severance package approval were also forthcoming.


When Bill Rolls Off: Continuity and Change on Corporate Boards

Peter Cziraki is the Assistant Professor of Finance at Texas A&M University and Adriana Robertson is the Donald N. Pritzker Professor of Business Law at the University of Chicago Law School. This post is based on their recent paper. Related research from the Program on Corporate Governance includes Politics and Gender in the Executive Suite (discussed on the Forum here) by lma Cohen, Moshe Hazan and David Weiss; Will Nasdaq’s Diversity Rules Harm Investors? (discussed on the Forum here) by Jesse M. Fried; and Duty and Diversity (discussed on the Forum here) by Chris Brummer and Leo E. Strine Jr.

Over the last decade, there has been a major push to diversify corporate boards. For example, the proportion of women directors of firms in the S&P 500 index rose from around 10% in 2000 to over 30% in 2023. It is also well-established that larger firms have more women directors than smaller ones.We study where these women directors came from and how they’ve been absorbed in our paper, When Bill Rolls Off: Continuity and Change on Corporate Boards.


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