Investors, public interest advocates, the financial sector, regulators, policymakers, and elected officials in the U.S. and abroad have paid increasing attention to the way companies address environmental, social, and governance (“ESG”) issues in recent years. Over the last decade or so, more and more investors are considering how companies incorporate these factors into their operations, risk assessments, and planning when making investment decisions.
In our July 14 white paper, What is ESG and Why is it So Important?, Better Markets explores these ESG issues, particularly the impact of climate change and the prospects of competition in a decarbonized economy.
The Securities and Exchange Commission (SEC) has a vital and appropriate role in ensuring that corporations meet investor demand for information about ESG factors. While skeptics and outright opponents of ESG engagement call for safe harbors to protect companies from liability for disclosures, we see reasons for optimism about the SEC’s increased focus on ESG issues in capital markets regulation.