SEC Officials Push Back On ESG Disclosure Recommendations

At an Asset Management Advisory Committee ("AMAC") meeting, SEC officials considered a subcommittee's proposed recommendations on environmental, social, and governance ("ESG") disclosure.

Division of Investment Management Director Dalia Blass questioned whether it is appropriate to recommend different issuer disclosures for ESG material risks than for other potential areas of risk. In relation to the ESG Subcommittee's disclosure recommendations, Ms. Blass identified the following areas of concern:

• the potential reliance of the SEC on non-SEC unregulated third-party standard setters in the ESG area;
• the role of disclosure liability in mandated ESG disclosures; and
• the different types of disclosures that might be required for different types of issuers and for advisers as opposed to issuers.