Hester M. Peirce and Elad L. Roisman are Commissioners at the U.S. Securities and Exchange Commission. This post is based on their recent public statement. The views expressed in this post are those of Ms. Peirce and Mr. Roisman and do not necessarily reflect those of the Securities and Exchange Commission or its staff.
Over the past two weeks, we and the public have seen a steady flow of SEC “climate” statements and press releases. [1] Our Divisions of Corporation Finance, Examinations, and Enforcement all have announced climate- or ESG-related initiatives. What does this “enhanced focus” on climate-related matters mean? The short answer is: it’s not yet clear. Do these announcements represent a change from current Commission practices or a continuation of the status quo with a new public relations twist? Time will tell. In the meantime, it is important to contextualize the recent announcements by providing some historical and procedural background.
The Division of Corporation Finance, per a recent statement by the Acting Chair, will enhance its focus on climate-related disclosure in public company filings and embark on the task of updating the Commission’s guidance in this area. [2] The staff of our Corporation Finance Division has been reviewing companies’ disclosures, assessing their compliance with disclosure requirements under the federal securities laws, and engaging with them on climate change and a variety of issues that fall under the ESG umbrella, for decades. For example, the Commission approved the 2010 Commission Guidance Regarding Disclosure Related to Climate Change, [3] and Division staff regularly assesses whether climate-related disclosures comply with our rules. [4] Indeed, even before the Commission issued its 2010 guidance, our disclosure regime encompassed climate-related issues. [5] All of the Division’s work has been rooted in materiality, the touchstone we use in assessing issuer disclosure on all topics, including climate.
