On March 19, 2021, the SEC’s Asset Management Advisory Committee (AMAC) held a meeting to discuss the December 2020 potential recommendations that its ESG Subcommittee provided to the SEC on ESG disclosure requirements. During the meeting, the Diversity & Inclusion (D&I) Subcommittee of AMAC also made potential recommendations to improve D&I in the asset management industry. AMAC is comprised of a diverse group of industry participants, and its views are more important than ever because…

Today, the SEC released a statement by Division of Corporation Finance Acting Director John Coates on ESG disclosure. In this post, we provide our observations on what his statement may indicate about the direction of globally coordinated efforts on ESG disclosure. Acting Director Coates is interested in developing global ESG disclosure standards, stating that the SEC “should help lead the creation of an effective ESG disclosure system.” He elaborated that “arguments in favor of a…

Yesterday, the Securities and Exchange Commission announced a newly created Climate and ESG Task Force in the Division of Enforcement. The announcement is a reminder for public companies, investment advisers and funds to prepare for increased enforcement scrutiny regarding ESG disclosures, plans, and investment products. The new task force also is the latest signal of an effort to portray an SEC enforcement program that is both more aggressive and increasingly focused on specific policy objectives.…

SEC Chair Hearing.  Yesterday, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a nomination hearing to consider Gary Gensler’s candidacy for Chair of the Securities and Exchange Commission, or SEC. Throughout the hearing, Gensler fielded numerous questions on environmental, social and corporate governance and disclosure matters. This post synthesizes the most salient points from his testimony. The post also provides information on the SEC’s 2021 examination priorities and legislative bill activity occurring…

The Federal Reserve’s final guidance on board of directors’ effectiveness (Board Effectiveness Guidance) is a key milestone in its multi-year review of the practices of boards of directors, particularly at the largest banking organizations.  This memorandum describes the final Board Effectiveness Guidance and highlights key changes from the proposal.  It also describes its interactions with fiduciary duties and listing requirements. The Federal Reserve also announced the results of its review of 27 SR letters which…

Yesterday, the SEC released a statement on climate change disclosures. The statement directs the SEC staff to review company disclosures against its 2010 climate change disclosure guidance. In light of these events, this client alert provides our prior comprehensive summary of the SEC’s 2010 guidance and identifies what issuers should do in the short and long term to be prepared for future regulatory action. Read the full alert here.…

On February 8, 2021, ISS announced the updated methodology guide the firm uses to determine a company’s Governance QualityScore (GQS), its proprietary rating system designed to help institutional investors assess companies for governance quality and risk. Seventeen new factors have been added, which ISS states is the largest GQS methodology release in recent years. What GQS Measures GQS is a decile-based score meant to indicate the corporate governance risk relative to other companies in a…