June 20, 2019

What If the Post Office Was the SEC?!?

The SEC celebrated its 85th birthday a couple weeks ago. You probably know that the Securities Act was one of FDR’s reform initiatives way back in 1933. But did you know that one of the first suggestions he received was for the US Post Office to regulate the securities law? The Post Office! Eventually the SEC was created under a different version of the bill, which passed either because it was “so [darned] good or so [darned] incomprehensible.” Some things never change…

Find more interesting historical details in this book excerpt – which Jeffrey Rubin of Ellenoff Grossman was kind enough to share.

More Exchanges Are Beating the “Sustainability” Drum

Ninety percent of exchanges now have ESG initiatives, according to this survey from the World Federation of Exchanges. No wonder it’s so hard to keep track of who’s doing what. Luckily, most of the initiatives are converging around the UN Sustainable Development Goals. From the WFE’s announcement, here’s a few other findings:

– Although two-thirds of responding exchanges encourage or require ESG disclosure, there is still no consistent global standard for ESG reporting.

– While there appears to be growing investor demand for ESG disclosure, the level of this demand is still considered to be limited in many markets.

– Sustainability indices remain the most commonly offered products, but there has been considerable growth in ESG-related bond offerings, with 73% of exchanges with sustainability products offering green bonds in their markets.

ESG Disclosure Guides: So Many to Choose From

As a follow up to last week’s blogs on sustainability reporting, there’s no shortage of guidelines for disclosure. In fact, that’s part of the problem…and why some predict that companies & investors will end up coalescing around frameworks that are more principles-based, like what’s offered by the UN Sustainable Development Goals or the TCFD – see this Troutman Sanders memo.

Here are three relatively recent disclosure guides (also see this blog about moving sustainability reporting into SEC filings – and this new Nasdaq survey of large company disclosure trends):

1. The 65-page “TCFD Implementation Guide” – brought to you by the Sustainability Accounting Standards Board (SASB) and the Climate Disclosure Standards Board (CDSB) – focuses on annotated mock disclosures that align with the principles of the Task Force on Climate-Related Financial Disclosures. According to this announcement, the guide is a direct response to requests from companies that want to see what effective climate-related disclosure looks like. Bonus points if you can keep all the acronyms straight – there’s a glossary on page 24 if you need help.

2. The “World Business Council for Sustainable Development” recently published this 34-page disclosure handbook that walks through the “who/what/why/how” of ESG disclosure (see pg. 28 for a handy checklist of key points)

3. Nasdaq’s 34-page “ESG Reporting Guide” summarizes reporting frameworks from the TCFD and the UN’s Sustainable Development Goals – as well as guidance & best practices gleaned from the World Federation of Exchanges & Nasdaq’s own pilot program for ESG reporting

SEC Commissioner Nominee: Allison Lee Advances to Senate

Back in April, John blogged that Allison Lee had been nominated to fill the Commissioner vacancy created by the departure of Kara Stein. Bloomberg reported that the Senate Banking Committee has approved her nomination – so it now goes to the Senate. This blog says that the nomination hearing a few weeks ago was pretty short…

Liz Dunshee