SEC Officials Highlight Requests To Improve ESG Disclosures And Arbitration Process

SEC Chair Jay Clayton and SEC Commissioner Kara M. Stein highlighted (i) the increasing number of investor requests for improved environmental, social and governance ("ESG") disclosures, and (ii) the need to improve the arbitration awards process.

In remarks to the SEC Investor Advisory Committee, Mr. Clayton stated that the agency observed an increasing number of issuers disclosing ESG information and requests for ESG information by investors. He argued that (i) companies should focus on providing material disclosures that investors need in order to make informed investment and voting decisions and (ii) investors should also focus on each company's specific circumstances.

Ms. Stein emphasized that certain investors believe it is critical to understand ESG matters to better evaluate a company's performance. According to Ms. Stein, the reason that 43 percent of the shareholder proposals submitted during the last proxy season focused on ESG issues is because these