Bite-Sized Business Law Sean Griffith on the SEC's Authority to Mandate ESG
Climate disclosures are probably the most prominent ESG issues these days, and today’s episode is all about the SEC’s expansion into ESG disclosures and why this decision isn’t valid under the constitution, nor is it wise. Joining us to share his thoughts on the topic is Professor Sean Griffith, an expert in corporate and securities law who teaches at Fordham Law School and is the author of the paper entitled ‘What's controversial about ESG?’ Historically, the SEC has asked corporations to describe their assets, their management, and their corporate governance, but by getting into climate disclosure they are broaching a whole new territory, and by doing so they are opening themselves up to challenges to their authority. To read the full paper visit the link https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4118755
This conversation is guaranteed to give you a lot to think about!
Key Points From This Episode:
- The focus of Sean’s most recent piece, ‘What’s Controversial About ESG?’
- Sean shares what motivated him to write this piece.
- An overview of the SEC’s current climate proposals.
- The definition of materiality.
- Pre-existing rules that require companies to make climate-related disclosures.
- Where the SEC derives its authority to mandate disclosures.
- What most SEC regulations require of corporations.
- The role of the SEC.
- The two opposing camps of belief on the constitutionality of the SEC’s decisions.
- Exploring the Commercial Speech Doctrine.
- The key to winning a constitutional law case.
- Sean explains what makes the SEC’s ESG proposal so controversial.
- What all investors want.
- Ways by which institutional asset managers can rate investments for ESG investors.
- Three first amendment arguments around SEC regulations relating to climate disclosures.
- Why Sean thinks it is highly likely that the SEC’s rules in the ESG area won’t survive.
- What the SEC should and shouldn’t be doing.
Links Mentioned in Today’s Episode: