Exclusive: The S.E.C.’s evolution on E.S.G.
Allison Herren Lee was named acting chair of the Securities and Exchange Commission in January, and since then she has been active, especially when it comes to environmental, social and governance, or E.S.G., issues. The agency has issued a flurry of notices that such disclosures will be priorities this year. Today, Ms. Lee, who was appointed as a commissioner by President Donald Trump in 2019, is speaking at the Center for American Progress, where she will call for input on additional E.S.G. transparency, according to prepared remarks seen by DealBook.
The supposed distinction between what’s good and what’s profitable is diminishing, Ms. Lee will argue in the speech, saying that “acting in pursuit of the public interest and acting to maximize the bottom line” are complementary. The S.E.C.’s job is to meet investor demand for data on a range of corporate activities, and Ms. Lee’s planned remarks suggest that greater transparency on E.S.G. issues won’t be optional for much longer. “That demand is not being met by the current voluntary framework,” she will say. “Human capital, human rights, climate change — these issues are fundamental to our markets, and investors want to and can help drive sustainable solutions on these issues.”
Ms. Lee will also argue that “political spending disclosure is inextricably linked to E.S.G. issues,” based on research showing that many companies have made climate pledges while donating to candidates with contradictory voting records. The same goes for racial justice initiatives, she will say.
This is not an interim priority. Ms. Lee is acting chief, but based on recent statements by Gary Gensler, President Biden’s choice to lead the S.E.C., she’s laying the groundwork for more action rather than throwing down the gauntlet. In his confirmation hearing this month, Mr. Gensler said that investors increasingly wanted companies to disclose risks associated with climate change, diversity, political spending and other E.S.G. issues.
Not everyone at the S.E.C. is on board. Hester Peirce and Elad Roisman, fellow commissioners also appointed by Mr. Trump, recently protested the “steady flow” of climate and E.S.G. notices. They issued a public statement, asking, “Do these announcements represent a change from current commission practices or a continuation of the status quo with a new public relations twist?”
Speaker Nancy Pelosi and Representative Alexandria Ocasio-Cortez suggested, to varying degrees, that the governor of New York consider resigning over allegations of sexual harassment. He has rejected those calls and is considering running for a fourth term.
The U.S. is considering new ways to protect itself against cyberattacks. Efforts by China and Russia to breach government and corporate computer networks — and the failure of American intelligence to detect them — have spurred discussions about ways to organize U.S. cyberdefenses, including more partnerships with private companies.
Credit Suisse is accused of continuing to help Americans evade taxes. The Swiss bank aided clients in hiding assets, seven years after it promised U.S. federal prosecutors that it would stop doing so, according to a whistle-blower report. That puts the firm at risk of a fresh investigation and more financial penalties. The bank said it was cooperating with the authorities.
A veteran Democratic official is poised to join the Biden administration. Gene Sperling, an economic wonk who served in the Clinton and Obama administrations, is likely to oversee the implementation of the $1.9 trillion stimulus plan, Politico reports.
Stripe is now Silicon Valley’s most valuable start-up. The payments processor has raised funding from investors like Sequoia and Fidelity at a $95 billion valuation. Stripe plans to use the money to expand in Europe, including in its founders’ home country, Ireland.
chief counsel of the cryptocurrency exchange Coinbase before joining the O.C.C. But his enthusiasm isn’t based on Bitcoin’s success as much as on his personal struggles, he told DealBook.
Mr. Brooks borrowed his way out of an ailing town. He grew up in Pueblo, Colo., a steel center that lost its purpose in the 1980s. His father took his own life when Mr. Brooks was 14, and he and his mother had little. In high school, he waited tables and took out loans for school, for a car and eventually for a home. Now, he’s betting that blockchain can help the underbanked do the same more easily.
“Unlocking credit availability allows people to move up the ladder,” Mr. Brooks said. Nearly 50 million Americans don’t have credit scores, but many are creditworthy. Traditional rating systems aren’t equipped for nuanced assessments that might include things like rent, Netflix bills or income from gig work. For many, the inability to borrow limits opportunities to achieve financial security.
At the O.C.C., Mr. Brooks started Project Reach, a financial inclusion initiative. His first move since resigning from the agency in January is to join the board of the fintech firm Spring Labs as an independent director, DealBook is the first to report. Among other things, the company is developing richer data environments for credit scoring using blockchain tech.
Finding solutions to financial inclusion that are immune to politics is key, noted Mr. Brooks, a Trump administration appointee. Credit, he argues, lets people bet on themselves regardless of which party is making policy, and the current system excludes many worthy borrowers. “Let’s let more people climb ladders,” Mr. Brooks said.
“It’s just a pent-up cycle where the money has nowhere to go, so it’s doing stupid things.”
— Howard Lindzon, an investor, entrepreneur and market commentator, speaking to The Times’s Erin Griffith on the booms (or bubbles) in everything from trading cards to Bitcoin, SPACs and so-called meme stocks.