June 23, 2021

SEC Chair Highlights Staff Directives on Climate Risk and Human Capital

At the London City Week, SEC Chair Gary Gensler highlighted recent requests to staff for recommendations on public company disclosure as to climate risk and human capital.

On climate risk and human capital disclosures, Mr. Gensler asked staff to consider (i) which specific metrics, such as greenhouse gas emissions and workforce demographics, investors most need, (ii) potential requirements for companies that have committed to, or operate in jurisdictions with, forward-looking climate targets, and (iii) marketing claims by funds that they are "sustainable, green or 'ESG'."

SEC Gary Gensler also requested that staff consider:

  • whether the current composition of the equity market best promotes efficiency and competition (see previous coverage here);
  • how to increase trading transparency in the Treasury cash and repo market;
  • shortening beneficial ownership reporting deadlines, which have not been updated in over 50 years;
  • disclosures on security-based swaps, which are not as "robust" as those in the rest of the market; and
  • bringing increased transparency to short selling, as the SEC has "unused authorities" that it was granted nearly 12 years ago.