CLIMATE DISCLOSURE
A Guide to the SEC’s Proposed Climate Disclosure Requirements
The SEC recently proposed significant new requirements to enhance and standardize climate-related disclosures.
Recent Publications
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Pay Equity Risks and Best Practices
Recent trends in employment discrimination settlements suggest that existing employment practices and evolving pay equity and pay transparency laws may leave some employers susceptible to civil and regulatory action. We report on these trends and suggest best practices for employers to reduce litigation risks and promote compliance with evolving state and local pay equity and transparency laws.
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SEC Announces Novel Human Capital Internal Controls Settlement with Activision Blizzard, Inc.
The SEC recently reached a novel $35 million settlement with video game giant Activision Blizzard resolving allegations that the company failed to maintain internal controls and procedures to ensure the adequacy of its SEC disclosures related to human capital—in this case, information related to workplace misconduct complaints.
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Nasdaq Updates Board Diversity Deadlines
Nasdaq recently amended its board diversity compliance deadlines, implementing a uniform cut-off date of December 31 in the applicable year of compliance. These revised deadlines will not practically affect the compliance schedule for most Nasdaq companies because the rules require these disclosures by the time of a company’s annual meeting proxy statement filing.
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ISS Issues Final Policy Updates for 2023 Proxy Season
ISS has issued final voting policy updates for the 2023 proxy season, effective for meetings on or after February 1, 2023. We highlight changes to ISS U.S. voting policies related to governance and board accountability, executive compensation, ESG-related proposals and capitalization.
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Glass Lewis Issues 2023 Voting Policies
Proxy advisory firm Glass Lewis (GL) has updated its U.S. voting policies applicable to shareholder meetings starting January 1, 2023. In this alert, we highlight the key changes, which relate to board diversity, board oversight of environmental and social issues, board accountability for climate-related issues, executive director overboarding, board oversight of cyber risk, officer exculpation and long-term incentive grants, as well as various clarifying amendments. We also discuss key changes to GL’s ESG Initiatives policy guidelines, which relate to disclosure of shareholder proponents, racial equity audits and retirement benefits and severance.
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SEC Division of Corporation Finance Publishes Sample Climate Disclosure Comments
The SEC Division of Corporation Finance recently issued a sample comment letter regarding a company’s climate-related disclosures. The comments highlight the SEC’s focus on risk and MD&A sections, and indicate that the SEC will review disclosures in corporate social responsibility/sustainability reports and compare them to those in SEC filings.
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SEC Approves Nasdaq Board Diversity Requirements
The SEC recently approved Nasdaq’s board diversity requirements, which will apply to all Nasdaq-listed companies, including non-U.S. issuers, smaller-reporting companies and controlled companies. This is a significant step by a U.S. stock exchange, and likely the first of more ESG-related rules to come, as the SEC has indicated its intent to take up board diversity rulemaking in the next year.
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IOSCO Issues Final Report on Sustainability-related Issuer Disclosures
The International Organization of Securities Commissions (IOSCO) has published a report that sets out a vision for a global baseline for sustainability standards for issuers. The report sets out expectations for an ISSB that would sit alongside the International Accounting Standards Board, building on and integrating the content and recommendations of existing frameworks, principles and guidance, and incorporating a “building blocks” approach that would enable certain jurisdictions to set reporting requirements beyond the ISSB’s baseline.
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President Biden Calls on Federal Government to Mitigate Climate-Related Financial Risk
President Biden recently issued an Executive Order on Climate-Related Financial Risk that calls on the federal government to take concrete steps to mitigate the growing physical and transition risks of climate change on the U.S. economy, workers and families. This client alert, part of a series focused on ESG disclosure and regulatory developments, highlights key aspects of the order.
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SEC Highlights Compliance Issues Related to Investment Advisers Offering ESG-Related Investment Products
The SEC’s Division of Examinations published a Risk Alert highlighting observations of deficiencies and internal control weaknesses from recent examinations of investment advisers offering products, including private funds, whose investment strategies incorporate environmental, social and governance factors.
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President Biden Sets Out Ambitious American Jobs Plan with Significant Climate-Related Proposals
President Biden recently set out his administration’s ambitious approximately $2.25 trillion American Jobs Plan to create jobs, rebuild the country’s infrastructure, address the climate crisis and better position the country to compete with China. Our alert summarizes the climate-related aspects of the proposal.
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CFTC Continues to Move Forward on Climate Change
Acting CFTC Chairman Rostin Behnam recently announced the establishment of a Climate Risk Unit to focus “on the role of derivatives in understanding, pricing, and addressing climate-related risk and transitioning to a low-carbon economy.”
Introduction to ESG
Introduction to ESG
“ESG” describes a set of environmental, social and governance factors used to evaluate investment and company impacts beyond traditional financial measures. ESG topics are now the subject of significant focus by asset managers, asset owners such as pension funds and insurance companies, and other investors, as well as by proxy advisory firms, index providers, regulators and rating agencies.
ESG Disclosures
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ESG Disclosures: Frameworks and Standards Developed by Intergovernmental and Non-Governmental Organizations
As ESG matters have increasingly become the focus of investors and regulators, standards of disclosure created by intergovernmental and non-governmental organizations, as well as industry participants, have gained market prominence. While most ESG disclosure is made on a voluntary basis, that is beginning to change, particularly in Europe.
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ESG Disclosures: Task Force on Climate-related Financial Disclosures
Since their publication in 2017, the Task Force on Climate-related Financial Disclosures (TCFD) recommendations for voluntary disclosures by companies concerning their climate-related financial risks have emerged as a leading international framework for climate-related disclosures. This client alert, part of a series focused on ESG developments, summarizes the aims of the TCFD and its disclosure recommendations.
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ESG Disclosures: The Push for Consistent and Comparable Standards – Europe
The European Union has taken a leading role in advancing ESG disclosure requirements across the full spectrum of sustainability topics. Some of the initiatives are focused largely on climate issues, while others address broader sustainability concerns. This client alert, part of a series that reviews developments in the ESG disclosure landscape, provides an introduction to the current ESG regulatory disclosure frameworks of the European Union.
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ESG Disclosures: The Push for Consistent and Comparable Standards – United Kingdom
The United Kingdom has been an early adopter of ESG regulations and guidelines; a number of recent initiatives in the United Kingdom highlight the extent to which a focus on ESG among corporates, investors and financial institutions has become a “new normal.” This client alert, part of a series that reviews developments in the ESG disclosure landscape, provides an introduction to the current ESG regulatory disclosure framework in the U.K.
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The U.S. Regulatory Framework for ESG Disclosures
The SEC takes a principles-based, materiality-focused approach to disclosure that applies equally to environmental, social and governance (ESG) disclosures. This client alert, part of a series that reviews developments in the ESG regulatory landscape, provides an introduction to the current ESG regulatory disclosure framework in the United States.
ESG in Conversation
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Katherine Forrest, Jonathan Ashtor and Dave Curran Note How the Use of AI Can Help or Hinder ESG Efforts in Corporate Counsel Column
Litigation partner Katherine Forrest, corporate partner Jonathan Ashtor and Sustainability & ESG Advisory Practice Co-Chair Dave Curran co-authored an “Expert Opinion” column in Corporate Counsel, “The Intersection of Artificial Intelligence and ESG,” published on June 20.
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Dave Curran, Katherine Forrest and Jonathan Ashtor Host Program on ESG and AI Risk Management
On May 9, Sustainability and ESG Advisory Practice Co-Chair Dave Curran and partners Katherine Forrest and Jonathan Ashtor co-hosted an in-person event, “Navigating AI Risk Management from an ESG Perspective,” in collaboration with Deloitte Touche at Paul, Weiss’s New York office.
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David Fein Describes How Financial Institutions Can Combat Wildlife Trafficking Through ESG Initiatives in Law.com Column
Litigation special counsel David Fein published an “Expert Opinion” column in Law.com, “How Financial Institutions Can Help Combat Wildlife Trafficking Through ESG Initiatives,” on February 15.
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Harris Fischman Publishes Article on SEC Greenwashing Requirements in Corporate Counsel
Litigation partner Harris Fischman wrote an article on potential implications for future SEC enforcement activity under the agency’s proposed greenwashing disclosure requirements, published in Corporate Counsel on November 1.
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Loretta Lynch, Jeannie Rhee, Dave Curran and Lissette Duran Publish Corporate Counsel Article on the Importance of Racial Equity Audits
Litigation partners Loretta Lynch and Jeannie Rhee, Sustainability & ESG Advisory Practice Co-Chair Dave Curran and ESG associate Lissette Duran co-wrote an article for Corporate Counsel on the ways racial equity audits can be used as a tool to address longstanding issues of inequality in the workplace.
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Jeannie Rhee Discusses ESG Practice in LEADERS Magazine
LEADERS Magazine featured litigation partner Jeannie Rhee in a Q&A in its July, August, September 2022 issue.
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Dave Curran Discusses ESG’s Impact on Corporate Reputation in RepTrak’s “Ultimate ESG Guide”
Sustainability and ESG Advisory Practice Co-Chair Dave Curran discussed the importance of ESG with reputation, data and insights company RepTrak in its “Ultimate ESG Guide.”
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Dave Curran and Brad Karp Discuss Rapidly-Evolving ESG Priorities Resulting From Russian Invasion of Ukraine in Corporate Counsel
Sustainability and ESG Advisory Practice Co-Chair Dave Curran and firm Chairman Brad Karp discuss how lawyers can help companies reexamine their ESG priorities in light of Russia’s invasion of Ukraine.
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Dave Curran Discusses Importance of Corporate Governance With Reuters
Sustainability & ESG Advisory Practice Co-Chair Dave Curran discussed corporate governance and other ESG topics in a Reuters article published on April 13.
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Dave Curran Interviewed in NACD Private Company Directorship Newsletter
Sustainability & ESG Advisory Practice Co-Chair Dave Curran was featured in an interview in NACD Private Company Directorship Newsletter.
ESG Lexicon
Paul, Weiss’s Sustainability and Environmental, Social & Governance (ESG) Advisory Practice helps clients develop integrated ESG strategies that safeguard corporate reputation, mitigate risk and leverage opportunity.