House Democrats convened a panel of experts Thursday to argue that US financial regulators must take bold action to combat climate change, economic and racial inequality because of the “fundamental threat” these forces pose to the system. American financier. The proposals presented during a House Financial Services subcommittee hearing, which took place just days before the Senate begins considering President Joe Biden‘s nomination of Gary Gensler to be the next chair of the Securities and Exchange Commission and Securities could serve as a model for the SEC in the future, given Gensler’s reputation for aggressive regulatory action.
Read: Senate panel to hold nomination hearings for SEC, CFPB heads March 2 “Shareholders want more information than earnings per share; they especially want information on climate change,” said Rep. Brad Sherman, Democrat of California who directs the Subcommittee on Investment Protection, Entrepreneurship and Capital Markets. Sherman added that the number of extreme weather events costing more than $ 1 million each year has increased by 300% over the past forty years. Now Read: Ignore Climate Change At Your Own Risk, Says BlackRock: Green Energy Transition Will Drive 25% Production Growth By 2040 “Climate change is real and it‘s affecting us,” he added. “We want to change the behavior of corporations, both to prepare them for climate change and to minimize its effect on climate change.” A number of witnesses argued that there is an urgent need for public companies to provide more information on climate-related risks, charitable and political giving, and human capital management. James Andrus, an investment manager for the California Public Employees Retirement System, which manages approximately $ 400 billion in assets, said his firm considers “weather-related risks to be among the top three risks to the value of the company. long term of our portfolio. ” and that CalPERS believes it deserves to know how its capital is being deployed for political purposes. “We do not question whether the expenses [on political donations] it must be done, but if it is done, it must be disclosed, so that we have information and can make appropriate investment decisions, “he added. Andrus also advocated for greater disclosure on how companies manage their workforce, given that human capital is an increasingly important part of the financial success of the world’s most innovative companies. Michigan Rep. Bill Huizenga, the highest-ranking Republican on the subcommittee, argued that the proposed disclosures were not intended to help inform investors, but to arm activists who wish to “name and shame” companies that “perceive like corporate villains. ” He added that “these kinds of mandatory disclosures only waste private sector resources” that could be better used to invest in new technology or increase workers’ wages. Vivek Ramaswamy, founder of biopharmaceutical company Roivant Sciences, spoke out against efforts to demand more mandatory disclosure on these topics. “If we are honest, let’s recognize that today’s debate is not about protecting investors, it is about fighting climate change,” he said. “And I’m not saying it’s a bad goal, but I think that’s what’s going on here.” “Protecting investors is not the main reason, it is a justification,” he added. “If the goal were to protect investors, there are many other disclosures that I would order ahead of weather risks on a wide range of topics.” Rawaswamny also argued that increased mandatory disclosure requirements will discourage private companies from going public, exacerbating a trend of large private companies avoiding public investment in favor of the benefits of lower regulatory scrutiny. However, the SEC appears to be preparing to demand further disclosure, at least on the issue of climate change risk. Acting President Allison Herren Lee said Wednesday that she has directed the agency’s corporate finance division to review whether public companies are adequately disclosing climate-related risks based on guidance issued in 2010, and to prepare to update the SEC policy on weather disclosures. “Now more than ever, investors are considering climate-related issues when making investment decisions,” he said. “It is our responsibility to ensure that they have access to material information when planning their financial future.”