{"id":302776,"date":"2021-03-24T18:45:22","date_gmt":"2021-03-24T22:45:22","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=302776"},"modified":"2021-03-24T18:45:27","modified_gmt":"2021-03-24T22:45:27","slug":"sec-eyes-forcing-companies-to-disclose-data-on-social-issues-sparking-politicization-concerns","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sec-eyes-forcing-companies-to-disclose-data-on-social-issues-sparking-politicization-concerns\/","title":{"rendered":"SEC Eyes Forcing Companies To Disclose Data On \u2018Social\u2019 Issues, Sparking \u2018Politicization\u2019 Concerns"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsec-eyes-forcing-companies-to-disclose-data-on-social-issues-sparking-politicization-concerns%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=302776&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-3307.jpeg?w=1200&amp;h=800&amp;ixlib=react-9.0.3\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span>Weeks into the Biden administration, the Securities and Exchange Commission (SEC) is mulling a larger focus on the \u201cEnvironmental, Social, and Governance\u201d (ESG) actions of publicly-traded companies \u2014 amorphous categories that one industry official said could lead to \u201cpoliticizing the role of the corporation\u201d that \u201cwill inevitably alienate not only a large portion of a company\u2019s customer base but a significant percentage of the company\u2019s workforce.\u201d<\/span><\/p>\n<p><span>At various times, the SEC has weighed whether to require companies to disclose information to investors related to issues under the broad umbrella called \u201cESG.\u201d Over the last year and especially in the last two months, the agency\u2019s focus has sharpened.<\/span><\/p>\n<p><span>\u201cNo single issue has been more pressing for me than ensuring that the SEC is fully engaged in confronting the risks and opportunities that climate and ESG pose for investors, our financial system and our economy,\u201d Allison Lee, a Democrat appointed to the commission in 2019 and named acting chair by President Joe Biden, wrote in an <\/span><a href=\"https:\/\/www.greenbiz.com\/article\/secs-change-climate-climate-change-and-esg\"><span>op-ed<\/span><\/a><span> this month.<\/span><\/p>\n<p><span>The push will not end with climate change, Lee pledged. \u201cIn the near term,\u201d the SEC\u2019s efforts should include initiatives such as encouraging companies to report workforce and board diversity, she said.<\/span><\/p>\n<p><span>Republican SEC Commissioner Hester Peirce warned that the environmental and social categories are both \u201cquite unclear,\u201d and may be \u201cdriven by people who want to know the information for other reasons.\u201d<\/span><\/p>\n<p><span>\u201cA lot of the push for new disclosures is being driven by factors other than what normally drives our disclosure requirements, which is, what is material to a reasonable investor,\u201d she told The Daily Wire.<\/span><\/p>\n<p><span>\u201cA lot of people who have concerns about a whole range of issues, social issues or climate issues or whatever, they\u2019re looking at the SEC as the tool to work on those policies,\u201d Pierce said. \u201cIt does run the risk of causing the SEC to engage in mission creep, and that\u2019s really problematic, because our core mission is a really important one, and we don\u2019t want to be pulled away from that.\u201d<\/span><\/p>\n<p><b>Related: <\/b><a href=\"https:\/\/www.dailywire.com\/news\/deloitte-tells-employees-microaggressions-are-considered-a-punishable-offense\"><b>Deloitte Tells Employees \u2018Microaggressions\u2019 Are Considered A Punishable Offense<\/b><\/a><\/p>\n<p><span>Proponents of expanding ESG disclosure requirements argue that while there are outside entities that offer ESG data on companies, there is no consistent and reliable standard for comparing the data.<\/span><\/p>\n<p><span>But Yafit Cohn, the chief sustainability officer and general counsel for insurer The Travelers Companies, expressed vehement opposition to expanding ESG disclosure during an SEC panel Friday, saying the term ESG \u201chas been usurped by a broad variety of special interest groups to advance interests unrelated to shareholder value.\u201d<\/span><\/p>\n<p><span>\u201cThose groups are increasingly calling upon corporations to solve complex societal issues that have historically been within the purview of a democratically elected government,\u201d she added.<\/span><\/p>\n<p><span>\u201cGiven the divided country we now live in, politicizing the role of the corporation will inevitably alienate not only a large portion of a company\u2019s customer base but a significant percentage of the company\u2019s workforce, as well,\u201d Cohn said.<\/span><\/p>\n<p><span>\u201cParadoxically, the politicization of both ESG and the role of the corporation \u2026 makes the corporation less sustainable over time,\u201d she said.<\/span><\/p>\n<p><span>Using the securities disclosure regime to achieve political goals not connected to increasing value for investors could create a disincentive for companies to list in U.S. markets and undermine the SEC\u2019s public confidence, she said. \u201cA very small group of like-minded individuals would be in a position to impact social change on a mass level\u201d without any debate or checks and balances.<\/span><\/p>\n<p><span>According to the Supreme Court\u2019s definition of materiality, some investors expressing interest in a particular issue does not make it material and therefore necessary for disclosure.<\/span><\/p>\n<p><span>\u201cI think we all need to pause and think deeply about the possible impact on our democratic structure if the corporation is used to engineer social change,\u201d Cohn said.<\/span><\/p>\n<p><span>Cohn also argued that different industries \u2014 and even different companies within the same industry \u2014 would struggle to comply with a uniform approach for ESG disclosure. She also worried about lawsuits against companies resulting from the disclosures, which would burden shareholders.<\/span><\/p>\n<p><b>Related: <\/b><a href=\"https:\/\/www.dailywire.com\/news\/coca-cola-says-it-will-only-hire-law-firms-that-meet-quota-for-black-attorneys\"><b>Coca-Cola Says It Will Only Hire Law Firms That Meet Quota For Black Attorneys<\/b><\/a><\/p>\n<p><span>Some asset managers are getting a taste of expanded ESG disclosure thanks to sweeping new disclosure regulations on climate and social issues that went into effect in the European Union this month. U.S. asset managers that do business in the E.U. must comply with new rules requiring them to document and disclose potential effects of their investments on the climate and society, including board gender diversity and greenhouse-gas emissions.<\/span><\/p>\n<p><span>In the U.S., one new SEC move came in the form of a new enforcement task force <\/span><a href=\"https:\/\/www.sec.gov\/news\/press-release\/2021-42\"><span>announced<\/span><\/a><span> by Lee this month. The task force will work to identify ESG-related misconduct, with an initial focus on identifying \u201cmaterial\u201d gaps or misstatements in companies\u2019 disclosures of climate risks, meaning the information would be viewed as relevant by a reasonable investor.<\/span><\/p>\n<p><span>In 2010, the SEC offered <\/span><a href=\"https:\/\/www.sec.gov\/rules\/interp\/2010\/33-9106.pdf\"><span>guidance<\/span><\/a><span> to public companies on climate change disclosure. Now, the agency will scrutinize how well public companies are adhering to the guidance and complying with current climate disclosure requirements.<\/span><\/p>\n<p><span>One thing the SEC is looking to crack down on is \u201cgreenwashing,\u201d or companies claiming that their products are more climate-friendly or socially responsible than they actually are in order to appeal to investors who prioritize those issues.<\/span><\/p>\n<p><span>In December, the ESG Subcommittee of the SEC Asset Management Advisory Committee issued a preliminary recommendation that the SEC require public companies to disclose ESG risks. On March 15, the SEC <\/span><a href=\"https:\/\/www.sec.gov\/news\/public-statement\/lee-climate-change-disclosures\"><span>requested<\/span><\/a><span> a public comment period on whether to expand the climate change disclosure requirements.<\/span><\/p>\n<p><span>The push for stronger and expanded disclosure on ESG factors first began to ramp up last May, when the SEC Investor Advisory Committee recommended that the regulator expand reporting requirements.<\/span><\/p>\n<p><span>\u201cThe message that we have heard consistently is that investors consider certain ESG information material to their investment and voting decisions,\u201d the committee said in a <\/span><a href=\"https:\/\/www.sec.gov\/spotlight\/investor-advisory-committee-2012\/recommendation-of-the-investor-as-owner-subcommittee-on-esg-disclosure.pdf\"><span>report<\/span><\/a><span>. \u201cThe use of ESG-related disclosures has gone from a fringe concept to a mainstream, global investment and geopolitical priority.\u201d<\/span><\/p>\n<p><em>The Daily Wire is one of America\u2019s fastest-growing conservative media companies and counter-cultural outlets for news, opinion, and entertainment. Get inside access to The Daily Wire by becoming a&nbsp;<\/em><a href=\"https:\/\/www.dailywire.com\/subscribe\"><em>member<\/em><\/a><em>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Weeks into the Biden administration, the Securities and Exchange Commission (SEC) is mulling a larger focus on the \u201cEnvironmental, Social, and Governance\u201d (ESG) actions of publicly-traded companies \u2014 amorphous categories &#8230;<\/p>\n","protected":false},"author":1,"featured_media":2311105,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-3307.jpeg?w=1200&h=800&ixlib=react-9.0.3","fifu_image_alt":"SEC Eyes Forcing Companies To Disclose Data On \u2018Social\u2019 Issues, Sparking \u2018Politicization\u2019 Concerns","footnotes":""},"categories":[],"tags":[],"class_list":["post-302776","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/03\/fb_image-3307.jpeg?w=1200&h=800&ixlib=react-9.0.3","fifu_image_alt":"SEC Eyes Forcing Companies To Disclose Data On \u2018Social\u2019 Issues, Sparking \u2018Politicization\u2019 Concerns","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/302776","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=302776"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/302776\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2311105"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=302776"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=302776"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=302776"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}