The SEC and ESG: The Journey to Prescriptive Disclosure Requirements

Over the last several years, stakeholder demand for ESG-related disclosures from U.S. public companies has exploded. During that time, a multitude of ESG disclosure frameworks, ratings systems, proxy voting policies and investor engagement priorities have been established, each with their own objectives, scopes, definitions and standards. 

This generally voluntary and sometimes confusing ESG disclosure universe has frustrated both public companies and their stakeholders who are seeking consistent and comparable decision-useful data. However, in the absence of a unified ESG taxonomy with prescribed disclosure requirements, U.S. public companies and their stakeholders will continue to be frustrated.