Congressional Democrats Pen Letters to SEC On ESG Rule, Corporate Climate Disclosure Rule

Democratic members of the House and Senate have recently penned two separate letters to Securities and Exchange Commission (SEC) Chair Gary Gensler on ESG related rulemakings. In May, 21 Democratic members in both the House and Senate called for the SEC to finalize its outstanding proposal to enhance ESG disclosure for investment advisers and investment companies. This letter was not joined by key Democratic financial services leaders such as House Financial Services Committee Ranking Member Maxine Waters (D-CA), Capital Markets Subcommittee Ranking Member Brad Sherman (D-CA), and Senate Banking Committee Chair Sherrod Brown (D-OH). The rule, proposed in May 2022, would broadly seek to categorize certain types of ESG strategies and require funds and advisers to provide more specific disclosures in fund prospectuses, annual reports, and adviser brochures based on the ESG strategies they pursue.

In a June letter, 38 Congressional Democrats including House Financial Services Ranking Member Maxine Waters (D-CA) sent a letter to SEC Chair Gensler requesting the Commission “ensure robust enforcement of existing SEC climate disclosure-related guidance.” The letter goes on to note that if the final rule, which is currently being challenged in the U.S. Eighth Circuit Court of Appeals, survives its legal challenges, “the Commission should then focus its efforts on vigorous implementation and enforcement of the rule.” On April 4, the SEC announced that it would voluntarily stay its final climate disclosure rules pending judicial review.

Click here to read the May Democratic letter on the investment adviser and investment company pending rule.
Click here to read the June Democratic letter on the finalized corporate climate disclosure rule.