As if issuers needed a reminder that it’s always the right time to be thinking about board composition, earlier this month, the SEC approved new Nasdaq rules that will require companies listed on that exchange to collect and report information about the diversity of their boards of directors. Under new Nasdaq Listing Rules 5605(f) and 5606, Nasdaq-listed companies will be required to publicly disclose on their websites or in their annual reports or proxy statements board-level diversity statistics using a template promulgated by Nasdaq and to explain why they do not have at least two (or one in the case of a company with five or fewer directors) diverse directors.… More
Under pressure from shareholder groups, investors and customers, you might already have “green initiatives” in your business plan, and you probably have already identified risks related to climate change and other social and environmental factors. Is there a way to cash in on what you are already doing by accessing the growing market for sustainability-linked loans (sometimes referred to as ESG-linked loans)? Here we will refer to these loans as sustainability-linked loans or SLLs.… More
On June 16, 2021, the U.S. House of Representatives passed legislation that would impose new ESG due diligence and disclosure requirements on publicly traded companies. H.R. 1187 – the ESG Disclosure Simplification Act of 2021 – would require publicly traded companies to disclose their commitments to ensuring that environmental, social (human rights), and good governance standards (ESG) are reflected in their operations, activities, and supply chains.
The Legislation’s Impact on ESG Due Diligence and Disclosure
On May 20, 2021, President Biden signed an Executive Order to address predicted financial instability in the federal government as a result of climate change. This Executive Order showcases a dramatic change in how the Biden Administration’s stance towards climate-finance and environmental, social, and governance (ESG)-based investments will differ from the previous administration.
The Executive Order, titled “Climate-Related Financial Risk” seeks to “bolster the resilience of our rural and urban communities,… More
As anticipated, the pace of change around the Climate and broader ESG landscape is accelerating rapidly. In this timely webinar, we discussed:
- The multiple market developments leading towards a rationalized corporate reporting system
- The role of the board and governance around the ESG agenda
- Practical steps to navigate the changing ESG landscape
This is the fifth in our First 100 Days series examining important trends in white collar law and investigations in the early days of the Biden administration. Our previous entry discussed investigations under the new Congress. Up next, a deep dive on liability under the False Claims Act.
As the Biden Administration began to take shape, many observers (including here at Foley Hoag) predicted that the SEC would move toward requiring standardized disclosures by issuers regarding their ESG risks and opportunities. … More
Special purpose acquisition companies (SPACs) have been gaining traction as one of the most popular exit strategies over the last year. They have been pitched as an easier way to go public because of the ease of working with one partner versus the large courting that typically happens with an IPO. But…is it too good to be true? Is this a fad or is it here to stay?
Our webinar panelists provide an overview of what a SPAC is,… More
Climate risk is investment risk.
So says BlackRock. And when you manage $8.7 trillion, people tend to listen to what you say. I’ve been noting for some time that BlackRock’s statements seemed to presage increasing shareholder activism with respect to climate. And yet there have been skeptics. As noted in ClimateWire last week, BlackRock’s actions have not always seemed to match its rhetoric.… More
Last month, General Electric agreed to pay a $200 million penalty to settle an SEC enforcement action arising from alleged disclosure violations concerning the company’s power and health insurance businesses. According to the SEC’s order, between 2015 and 2017, GE did not disclose that the profits it reported for those segments were largely attributable to changes the company made to its accounting practices in order to mask significant challenges that those business lines were facing. … More
In a recent post, we examined the growing clash within the SEC over whether to mandate and standardize disclosure by public companies of business impacts and risks associated with Environmental, Social, and Governance (ESG) concerns. Some at the SEC pushed for more standardized, comparable, and reliable disclosure of issuers’ exposure ESG risks. Others, including former Chairman Jay Powell, pushed back, arguing that current disclosure rules, which already require companies to disclose material risks,… More