Dems urge securities regulator to go big with final ESG rule

By Emma Dumain | 05/14/2024 06:27 AM EDT

The lawmakers say the Securities and Exchange Commission should not water down disclosure rulemaking.

Sen. Brian Schatz (D-Hawaii).

A group of Democrats, led by Hawaii Sen. Brian Schatz, want the Securities and Exchange Commission to release a strong environmental, social and governance investing disclosure rule. Jacquelyn Martin/AP

Earlier this spring, the Securities and Exchange Commission came under fire from some environmentalists for not putting out the strongest version of its proposed rule requiring public companies to disclose their climate impacts.

Now, 21 House and Senate Democrats are putting pressure on the Wall Street regulator to not hold back in a forthcoming regulation designed to force accountability in corporate America’s environmental practices.

Specifically, the lawmakers want SEC Chair Gary Gensler to adhere to certain components of his original, 2022 proposal aimed at tamping down “greenwashing” among companies that are currently seeking to appeal to climate-minded investors without having to offer proof that they are incorporating true environmental, social and governance practices into their operations.


The forthcoming final regulation for the “Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social and Governance Investment Practices” — or “ESG Disclosures Rule” — would put in place key requirements for proving investment funds and portfolios are truly reflective of ESG values.