Last week, SEC Commissioner Crenshaw--one of the Democratic members of the SEC Commission--addressed the Center for American Progress and the Sierra Club, and availed herself of the opportunity to once again vocally express support for the ESG disclosures that the SEC is planning to promulgate in the near future.

According to Commissioner Crenshaw, "there is significant investor demand for comparable, reliable, and decision-useful climate disclosures." And underpinning this demand is that "[i]nvestors and market participants understand that climate risk poses a threat that is profoundly impacting our capital markets today and will continue to do so in the future." Due to these concerns, Commission Crenshaw stated that "[a]ccurate and reliable climate metrics are not only important for investors' evaluation of sustainability efforts or how companies are spending shareholder money on politics, [but] it is also critical for assessing fundamental and traditional corporate governance matters, like executive compensation." In other words, developing a clear and consistent set of climate disclosures, grounded upon easily understood and comparable metrics, is foundational for any further efforts to encourage private sector companies to address the global issue of climate change.

Commissioner Crenshaw did not state anything in this speech beyond her prior remarks on the subject; however, her continued emphasis on the salience and importance of climate change disclosures demonstrates the ongoing commitment of the Democratic majority on the Securities & Exchange Commission to promulgate these ESG disclosure rules (despite dissent from the Republican minority on the Commission). Despite the lack of action to date, the SEC has not forgotten this policy priority of the Biden Administration.

However, without reliable and consistent disclosures about those ESG targets, I wonder whether investors and Boards have the tools to accurately assess if such targets have been met and if that alignment between executive pay and ESG targets has been achieved.

Given these concerns, among others, I am pleased the SEC currently has a climate change disclosure rulemaking on our regulatory agenda.