SEC Commissioner Caroline Crenshaw recommended that companies assess and adapt their internal accounting controls to safeguard corporate assets from evolving environmental, social and governance risks.

Ms. Crenshaw noted that new developments in technology, the global economy and the planet come with increased risks to public companies' assets. She cited ransomware attacks, climate change and the unauthorized use of a company's digital assets as examples of factors that were likely not contemplated by company management when their internal control measures were originally adopted. However, Ms. Crenshaw emphasized that all of these factors have the present ability to negatively impact a company's operations if the right safeguards are not in place. Accordingly, Ms. Crenshaw recommended that companies (i) identify the ESG risks that may impact the companies and their clients, now and in the future, and (ii) evaluate internal accounting controls to ensure they are dynamic enough to respond to these ESG risks.

Ms. Crenshaw further noted that investors view ESG risks as material to a company's financial performance, and that effective internal accounting controls ensure ESG risk disclosures to investors are accurate and reliable. She emphasized that such disclosures allow investors to make informed decisions as to the long-term sustainability or value of an investment. Ms. Crenshaw added that the existence of effective internal accounting controls provides assurances to investors that a company and its assets are adequately controlled and protected.