US congressional hearing on ESG

The US had its first congressional hearing on ESG issues on July 10th. “Building a Sustainable and Competitive Economy: An Examination of Proposals to Improve Environmental, Social and Governance Disclosures”, was held by the subcommittee on Investor Protection, Entrepreneurship and Capital Markets.

A recent report claims that ESG factors affect $12 trillion of US managed assets, up 38% on 2016. At the hearing, Carolyn Maloney, chair of the committee, described ESG as one of the most important topics in the markets but added, “ESG disclosures often aren’t as detailed as they should be and…are difficult to compare across companies.” She went on to say that the US Securities and Exchange Commission should set up standards on ESG disclosure that will apply to all US listed companies.

In the UK, it will be a mandatory requirement for all listed companies and large fund managers to report on climate-related risks by 2022, in line with the Task Force on Climate-Related Financial Disclosures recommendations. Meanwhile, the European Commission released its ESG recommendations last year and in March reached agreement on a way forward for ESG regulation.