The Securities and Exchange Commission presents its new climate proposal as a modest evolution in its longstanding rules requiring environmental disclosure. While supporters echo that pitch, most recognize the proposal as a large leap beyond the SEC’s traditional focus on material financial matters.
Who has the better of it may be inferred from the breadth of comments the SEC’s proposal received during the three-month comment period that ended June 17.
By sheer number, the proposal is record setting. The SEC has posted some 14,000 letters it received: These letters come from an astounding array of people and organizations, a far larger and diverse group than SEC rule proposals usually attract.
By comparison, only a handful of the thousands of SEC rule proposals have garnered anywhere near the level of comment letters as this one, and few with the diversity of views. For instance, the SEC’s proposal rules on disclosing compensation ratios and political contributions both drew large volumes of form letters (30,000 and 1.2 million!), neither drew as many tailored letters as the climate rule (those drew ~1500 and ~3400 respectively). Notably too, while the climate rule comment period has been open 3 months, those were open far longer: 1 year and 6 years, respectively. Suffice it to say: the climate rule is attracting inordinate attention.
While the SEC simply posts comments as received, with no attempt to classify them, here is a rundown based on my own classification effort:
- ~1,000 substantial substantive letters written by a diverse range of authors who clearly spent dozens to hundreds of hours on each
- ~ 3,000 less detailed but many nuanced and equally impassioned from individual investors not otherwise identifying an affiliation
- ~10,000 following about 30 different form letters that others energized, both for and against (few nuanced).
A breakdown of most of the first category by type illuminates.
READ MORE »
What the Volume and Diversity of Comment Letters to the SEC Say About its Climate Proposal
More from: Lawrence Cunningham
Lawrence A. Cunningham is the Henry St. George Tucker III Research Professor at George Washington University Law School.
Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) and Will Corporations Deliver Value to All Stakeholders? (discussed on the Forum here), both by Lucian A. Bebchuk and Roberto Tallarita; 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.; and Stakeholder Capitalism in the Time of COVID, by Lucian Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum here).
The Securities and Exchange Commission presents its new climate proposal as a modest evolution in its longstanding rules requiring environmental disclosure. While supporters echo that pitch, most recognize the proposal as a large leap beyond the SEC’s traditional focus on material financial matters.
Who has the better of it may be inferred from the breadth of comments the SEC’s proposal received during the three-month comment period that ended June 17.
By sheer number, the proposal is record setting. The SEC has posted some 14,000 letters it received: These letters come from an astounding array of people and organizations, a far larger and diverse group than SEC rule proposals usually attract.
By comparison, only a handful of the thousands of SEC rule proposals have garnered anywhere near the level of comment letters as this one, and few with the diversity of views. For instance, the SEC’s proposal rules on disclosing compensation ratios and political
While the SEC simply posts comments as received, with no attempt to classify them, here is a rundown based on my own classification effort:
A breakdown of most of the first category by type illuminates.
READ MORE »