July 19, 2019
In a heated House Financial Services Committee hearing, members considered five draft bills that would require publicly-held companies to disclose information on topics including climate change risk, political expenditures, and human rights risks.
The five draft bills included:
Democrats pushed for standardized, detailed reporting on ESG issues. “More must be done. Disclosures often aren’t as detailed as they need to be and they are difficult to compare across companies. The SEC should establish standards for ESG disclosure for all companies,” said Rep. Carolyn Maloney (D-NY).
“I think this is trying to set up disclosures to put political pressure on companies to do things that the Congress could never pass itself,” said Rep. Sean Duffy (R-WI).
Republicans argued that the cost of ESG reporting requirements will discourage more companies from raising capital within the public market. “Instead of placing additional burdens on public companies, we should be encouraging more growth and more IPOs here in the U.S., which will lead to more investment opportunities and choices for Main Street investors,” said Rep. Ann Wagner (R-MO).
Outlook: While the draft bills stand little chance in Congress, the concepts debated will likely gain further attention in the upcoming elections.