US ESG Regulatory Briefing | Better late than never: SEC moves in the right direction, but questions remain

ESG, United States 01 April 2022 15:59 Authors Alvaro Vivanco Head of EM and ESG Macro Strategy Stamford +1 203 8974896 Contributors {{contributor-span-repeater}} If you wish to discuss the content of this article further, please contact your usual sales person. Reminder, clients of Natwest Markets NV should reach out to their relevant NV sales person.

It has been long recognized the critical role regulators could play in pushing transparency on how climate risks are affecting companies, and how their actions in turn affect the environment and societies. The release of the SEC proposal is a landmark for climate action, even as its late arrival highlights the complicated nature of de-regulation politics. In this piece we describe how the Commission is well-positioned to advance climate reporting by providing specific disclosure guidance. We contextualize the proposed rule and analyze the viability and strength of the requirements amid a busy year for ESG activity. As designed, the disclosures would allow investors to make informed decisions backed by issuer-specific identified risks relating to their operations. On the other side, issuers would benefit by disclosing more efficiently and effectively, in line with investors’ demands. We note that the proposal did not come out of the blue – the majority of the rulemaking is directly derived from widely accepted frameworks such as the Task Force on Climate-Related Financial Disclosures (“TCFD”), and the Greenhouse Gas Protocol. By integrating widely-used frameworks and maintaining investor protection and legitimacy in mind, the Commission delivers on its commitment to provide guidance for more consistent, comparable, and decision-useful information. Please find attached a PDF with full details.    Please click here to find all of NatWest Markets’ Strategy and Sales commentary/ideas. You can also find out more about our electronic offering and credentials for Rates here and for FX here. This communication has been prepared by NatWest Markets Securities Inc., and should be regarded as a Marketing Communication, for which the relevant competent authority is the UK Financial Conduct Authority. Please follow this link for our historic Trade Ideas and Trade Idea Log - https://ci.natwest.com/regulatory-information/market-abuse-regulation-mar-disclosures Invitation to consider a derivatives transaction This communication is prepared by the sales and trading desk or desk strategists and is marketing material, desk strategy and/or trader commentary. It does not constitute research. This material constitutes an invitation to consider entering into a derivatives transaction under U.S. CFTC Regulations 1.71 and 23.605, where applicable, but is not a binding offer to buy/sell any financial instrument. The views of the author may differ from others at NatWest Markets Plc, NatWest Markets N.V. and/or NatWest Markets Securities Inc. (collectively “NatWest Markets”).

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