SEC preparing 50+ ESG regs for 2023

10 January 2023

The Securities and Exchange Commission (SEC) is aiming to release 52 regulations targeting ESG investing.

Over the next ten months, the SEC is expected to release 27 regulations currently in the proposal stage and 26 in the final rule-making stage.

The proposed regulations aim to support ESG investing by imposing mandatory climate risk disclosures on public companies.

The SEC is also seeking to strengthen ESG disclosures for investment funds and investment advisers as well as reform how investment funds are named to better reflect their strategies.

A final climate disclosure rule is due in April and the enforcement of the other two ESG measures are expected by October.

However, none of the deadlines for the release of regulations are binding.

This pro-ESG stance from the regulator has been a source of growing criticism from Republican states as lawmakers believe the SEC’s agenda is too fast and aggressive. 

In October 2022, a letter addressed to SEC chairman Gary Gensler six senators from Republican states urged the SEC to “slow its rulemaking tempo to ensure proper time for stakeholder feedback and deliberation.”

Senators from North Carolina, South Carolina, Idaho, South Dakota, Tennessee, and Montana said it is “hard to understand how the SEC is adequately performing the necessary due diligence and analysis required for its many pending rules.”

However, Gensler has since defended the pace of the SEC’s rulings as he believes the organisation must stay up-to-day to achieve its mission of protecting investors and maintaining efficient markets.

In a statement on January 4, Gensler said: “I support this agenda as it reflects the need to modernize our ruleset, moving deliberately to update our rules in light of ever-changing technologies and business models in the securities markets.”

Republicans’ criticisms of the SEC’s proposed regulation are the latest development of Republican states shunning ESG investments.

Earlier this month, Kentucky threatened to divest from 11 companies participating in the “boycott” of energy companies.