
By Bill Reilly
Subscribe to our original industry insightsIn 2021, with the change in administrations in Washington, D.C., the subject of Environmental, Social and Governance (“ESG”) came to the forefront in the Unites States. As indicated in previous blogs written by Oyster, the SEC has embraced ESG with various personnel appointments, efforts to obtain comments from both industry and consumers for potential rule promulgation, and the inclusion of investment-related matters of ESG as an examination priority of the SEC for 2021.
However, the SEC has been involved as far back as the 1980’s and 1990’s as it relates to public company/issuer disclosure of ESG-related matters. On February 8, 2010, the SEC issued an interpretive release, “Commission Guidance Regarding Disclosure Related to Climate Change.” The purpose of this release was to “provide guidance to public companies regarding the SEC’s existing disclosure requirements as they apply to climate change matters.”
In respect to climate change disclosures, the 2010 release noted four areas which may trigger disclosures by public companies:
As we move further into 2021 and 2022, broker-dealers and investment advisors should look to the information in the 2010 SEC release when establishing items, including procedures for reviewing existing/new products offered, business continuity plans, and “Methods of Analysis, Investment Strategies and Risk of Loss,” which is addressed as Item 8 on Form ADV Part 2. They should also refer to the release for purposes of being able to discuss ESG issues with their clients.
Oyster Consulting can help firms view the opportunities and risks associated with ESG-related investment strategies from a strategic and compliance standpoint, including creating or updating existing firm policies and procedures. Click here for more information or call (804) 965-5400 and one of our Relationship Managers will be happy to help you.
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