ESG Isn't Woke, It's Capitalism

With political battle lines drawn over environmental, social, and governance (ESG) disclosures, it is fair to ask whether the sustainability movement is itself sustainable. Our panelists, Dan Crowley (R) and Bob Eccles (D) discussed their support for sustainability as well as the grave political challenges it faces.

While the terms “sustainability” and “ESG” now mean very different things to different people, for purposes of this discussion, ESG factors are that subset of all sustainability issues that matter to investors and are thus important for enterprise value creation. This discussion is timely as the U.S. Securities and Exchange Commission (SEC) is currently working to determine what additional disclosures are needed, particularly with respect to climate-related risks. The SEC will need to determine which disclosures are material to investors and to balance that need with the cost to issuers. Congressional oversight hearings on ESG and SEC rulemaking process are certain. At the same time, a degree of bipartisanship will likely be required in order to advance any and all legislation.