The Securities and Exchange Commission could put into place guidelines on the federal monitoring of environmental, social, and governance issues as a Biden administration places greater focus on the climate change agenda.

Under the outgoing Trump administration, SEC Chairman Jay Clayton followed a more “principles-based approach” to climate disclosure, which has drawn criticism for inconsistent disclosure practices due to the voluntary nature of the framework, Benjmin D. Stone writes for Mondaq. Requirements were further eased this past August and October.

Commissioner Allen Herren Lee, one of two Democrats who joined Biden’s three-member majority, opposed the SEC’s decision to make changes to regulation S-K. Lee indicated that companies could be required to issue greater ESG disclosures.

“Shareholders are beginning to accomplish on climate change what they have accomplished on numerous other significant issues crucial to good governance and long-term value-focus management attention and drive valuable and needed change. The Commission should be encouraging this type of engagement, not stifling it,” Lee previously said.

“In the end, these amendments will restrict shareholders’ ability to oversee and engage with management of the companies they own. They do not properly value shareholder proposals or shareholder rights. And they will restrain shareholder efforts on issue that are of pressing importance to them and the broader economy,” Lee added.

Congressional Democrats have been promoting legislation to require companies to disclose ESG-related risks. In 2019, Senator Elizabeth Warren submitted S.2075, the “Climate Risk Disclosure Act of 2019,” which would have the SEC “require an issuer of securities to annually disclose information regarding climate-change related risks posed to the issuer, including an in issuer’s strategies and mitigate these risks. Among other things, issuers must report their direct and indirect greenhouse-gas emissions, disclose their fossil-fuel related assets, and establish standards regarding the social cost of carbon.”

Additionally, Representative Juan Vargas introduced a bill for public companies to disclose ESG metrics. H.R.4329, or the, “ESG Disclosure Simplification Act of 2019,” would establish a Sustainable Finance Advisory Committee within the SEC to “submit to the Commission recommendations about what ESG metrics the Commission should require issuers to disclose.”

Once president-elect Joe Biden takes office, these types of bills could come of committee and reach the voting floor.

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