The other side of ESG information
While the general direction of most major jurisdictions is towards improving, increasing, and mandating sustainability reporting, not everyone agrees that more needs to be done to support environmental, social and governance (ESG) disclosure.
In a recent speech, US Securities and Exchange Commission (SEC) Commissioner Mark Uyeda outlined his views on ESG, arguing that the existing regulatory framework is sufficient to support investors.
Uyeda argues that the risk of greenwashing in ESG investing can be tackled by existing frameworks that require investment advisors to adhere to defined strategies – the strategy in this case being investing for ESG outcomes. He outlines concern that increased regulation on ESG is unnecessary, and risks going beyond merely financially material information and strays into nudging investors towards a political agenda.
In the EU it’s a different story – with the Corporate Sustainable Reporting Directive’s (CSRD) inclusion of double materiality, EU disclosure requirements are looking beyond financially material sustainability information to include data on the climate change impact of companies.
Read Uyeda’s speech here.
