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Tomorrow, Treasury Secretary Janet Yellen will lead a meeting of the Financial Stability
Oversight Council (FSOC). The preliminary agenda for the open
session includes climate change and its potential impacts on
financial stability.
Appearing before Congress last week, Secretary Yellen stressed
the importance of FSOC and its unique role in coordinating
responses to issues like climate change. She specifically noted
that climate change is a top priority of the Biden
[a]dministration and FSOC can play a role in arranging
discussions among financial regulators all of whom have
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During the Trump administration, the number of consumer product safety recalls fell for three years in a row. When Robert Adler became Acting Chair of the U.S. Consumer Product Safety Commission (CPSC) in 2019, he compared his role to that of a caretaker. Now, under the Biden administration, the CPSC is undergoing a shift toward increased regulation and more aggressive enforcement. Acting Chair Adler confirmed the same earlier this year, stating that the Biden administration “clearly views product safety in different terms,” and that he “plan[s] to modify [his] job’s metaphor from caretaker to gardener.”
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While pressure from institutional investors, such as BlackRock, Vanguard, and State Street, has contributed to increased
focus and urgency on environmental, social, and governance (ESG)
matters, so has pressure from environmental groups, employees,
customers, and other corporate stakeholders. State
Street has announced that it will start voting against the boards
of companies that underperform their peers when it comes to ESG
standards.
Simultaneously, as we highlight below, the Securities and
Exchange Commission (SEC) announced, in the first quarter of 2021,
multiple efforts to highlight climate change in corporate
Bandwagon
noun
often attributive meaning 1. a usually ornate and high wagon for
a band of musicians especially in a circus parade; 2. a popular
party, faction, or cause that attracts growing support –
often used in such phrases as jump on the bandwagon ;
and 3. a current or fashionable trend.
1
The US Securities and Exchange Commission (SEC) recently
announced the creation of a Climate and ESG Task Force in the
Division of Enforcement
2. The SEC press release stated
that Consistent with increasing investor focus and reliance
on climate and [Environmental, Social and Governance] ESG-related
disclosure and investment, the Climate and ESG Task Force will
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ESG Issues Become Leading Concern for SEC and CFTC: SEC Warns Investment Advisers and Funds About ESG Disclosures Tuesday, April 27, 2021
Recent initiatives by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) evidence the agencies increasing intent to play significant roles in the ESG space.
On April 9, the Division of Exams (Exams) published an ESG Risk Alert (Risk Alert), describing areas where it is focusing in examinations of investment advisers and funds ESG products and services. Separately, on March 17, Rostin Behnam, Acting Chair of the CFTC, announced the establishment of the Climate Risk Unit (CRU) to support the [CFTC s] mission by focusing on the role of derivatives in understanding, pricing, and addressing climate-related risk and transitioning to a low-carbon economy.