SEC creates new senior climate change role

Regulator likely to pursue policies to incorporate climate risk as part of corporate disclosures

President Joe Biden’s pledge that his inauguration would mark a sea change for climate policy is already in action with the creation of a new top-ranking climate role in the Securities and Exchange Commission (SEC).

Acting chair of the SEC Allison Herren Lee has appointed Satyam Khanna, a former senior counsel adviser to SEC Commissioner Robert Jackson, as senior policy adviser for climate and ESG.

In this newly-created role, Khanna will advise the agency on environmental, social, and governance (ESG) matters and advance related new initiatives across its offices and divisions.

Herren Lee said: “Having a dedicated adviser on these issues will allow us to look broadly at how they intersect with our regulatory framework across our offices and divisions. Satyam’s experience, insight, and resourcefulness will help ensure our efforts in this space are thoughtful and effective.”

Khanna was most recently a resident fellow at NYU School of Law’s Institute for Corporate Governance and Finance, and served on the Biden-Harris Presidential Transition’s Federal Reserve, banking, and securities regulators agency review team.

He was previously a member of the SEC’s Investor Advisory Committee, where he served on the investor-as-owner subcommittee. Earlier, he was a senior advisor to the UN-supported Principles for Responsible Investment.

With this appointment, it seems likely the SEC will pursue policies to incorporate climate risk as part of corporate disclosures as well as addressing climate change as a systemic financial risk.

In her previous role as commissioner, Herren Lee noted the growing consensus that climate change may present a systemic risk to financial markets.

She said there was a need for complete, accurate and reliable information in order to assess that risk, starting with public company disclosure and financial firm reporting.

Steven Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets, said the appointment was “a critical step forward on the path to mandating climate risk disclosure and addressing climate change as a systemic financial risk”.

He said: “Appointing an agency-wide coordinator to study it and move the agency toward more disclosure is a good thing—and bodes well for the future resilience of our economy.”

Rothstein said he was “encouraged” by Khanna’s position on climate change, and was “looking forward to working with him to address it as a systemic risk to our markets and our economy”.

New age

The Trump administration dismantled environmental policies and rolled back pollution rules. This all now looks set to change with the election of Joe Biden, who has proposed the most ambitious programme to tackle the climate crisis of any president.

The US has already committed to rejoin the Paris Climate Agreement and there are also plans to invest $2 trillion in clean energy.

Treasury secretary Janet Yellen has said she wants to appoint a top official to lead climate change efforts and to establish a climate hub in the key department.

Within the SEC, Herren Lee has made several other executive staff appointments.

Prashant Yerramalli has been appointed chief of staff. Yerramalli has been at the SEC for five years working in a number of senior counsel roles, including the asset management unit. Before this he was a senior complex commercial litigation associate at Jenner and Block.

Frank Buda has been appointed deputy chief of staff. Since joining the SEC in October 2021 he has had a number of roles as an attorney-adviser, providing counsel to Herren Lee and Robert Jackson.

Eric Juzenas was appointed chief counsel. He previously provided counsel to commissioner Herren Lee. Prior to this worked in a number of regulatory and compliance roles, including Chatham Financial, Bloomberg and the Commodities Futures Trading Commission.

Adrien Anderson has been appointed director of administration. She was previously confidential assistant and counsel to commissioner Herren Lee at the SEC. Hugh Beck was appointed senior adviser for regulatory reporting.