On July 17, 2023, the U.S. Securities and Exchange Commission (“SEC”) urged Chinese companies to disclose certain business links they may have to Uyghurs and other Muslim minorities. The companies may face compliance risk and supply chain disruptions if they operate in the Xinjiang region of China or do business with companies that operate in the area known for its Uyghur population, the SEC said in new guidance. The Uyghur Forced Labor Prevention Act (“UFLPA”),…
On Monday the SEC released its long-awaited proposed rule changes that will require disclosure of climate-related risks that are reasonably likely to have a material impact on registrants. As noted in its press release, the SEC has focused on climate-specific rules in order to “provide investors with consistent, comparable and decision-useful information for making their investment decisions.” In sum, the Proposed Rule would require listed companies to disclose information in four key areas: (1) governance…
Yesterday the House of Representatives passed by a narrow margin the Governance Improvement and Investor Protection Act (H.R. 1187), which is a package of bills broadly requiring disclosure of ESG metrics in business (including supply chain impacts) and setting specific reporting expectations on climate risks, political spending, executive pay, and taxation rates. The legislation comes amidst indications by the SEC that mandatory disclosures related to ESG and climate impacts are a priority. Our analysis of…
As reported previously, developing new ESG and climate disclosure requirements (including those relating to supply chains impacts) is one of the SEC’s key priorities, and there have been indications that proposed rule-making on the issue may be imminent. The topic was once again raised by SEC Commissioner Allison Herren Lee this week at the 2021 ESG Disclosure Priorities Event. In her remarks, Commissioner Lee indicated that the SEC is working on a proposed rule on ESG disclosures…
The Securities and Exchange Commission (“SEC”) has taken a major step towards exercising its significant power to require companies to disclose greater information relating to ESG and climate impacts. On March 4, 2021, the SEC announced that it has formed a Task Force focusing on climate and ESG disclosure issues. The Task Force is a part of SEC’s Division of Enforcement and will be led by Kelly L. Gibson, the Acting Deputy Director of Enforcement.…
Financial regulatory and enforcement momentum focusing on environmental, social and governance (“ESG”) issues is building up from recent activities by US, EU and UK financial regulators. As a result, we anticipate that asset managers and financial intermediaries will increasingly seek to obtain and analyze ESG-related data and information from companies in which they directly or indirectly invest. The companies themselves, particularly publicly traded companies, will be expected to provide more ESG-related disclosure. As a result,…