Exclusive: The development of the SEC in relation to ESG
Allison Herren Lee was appointed acting chairman of the Securities and Exchange Commission in January and has been active ever since, particularly on environmental, social and governance (ESG) issues. The Agency has issued numerous notices that such information will be a priority this year. Today Ms. Lee, appointed Commissioner by President Donald Trump in 2019, speaks at the Center for American Progress, where she will seek input on additional ESG transparency following prepared remarks from DealBook.
The supposed distinction between good and profitable is decreasing. Ms. Lee will argue in the speech that “acting in the public interest and maximizing the bottom line” are complementary. The SEC’s job is to meet investor demand for data on a range of company activities, and Ms. Lee’s planned remarks suggest that greater transparency on ESG matters will no longer be optional. “This requirement is not 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 and can help find sustainable solutions to these issues.”
Ms. Lee will also argue that “political spending disclosure is intrinsically linked to ESG issues,” based on research showing that many companies have made climate commitments while donating to candidates with conflicting voting results. The same goes for racial justice initiatives, she will say.
This is not a temporary priority. Ms. Lee is acting boss, but based on recent testimony from Gary Gensler, President Biden’s decision to head the SEC, she lays the groundwork for more action rather than throwing the glove. In his audit hearing earlier this month, Gensler said investors increasingly wanted companies to disclose risks related to climate change, diversity, political issues and other ESG issues.
Not everyone at the SEC is on board. Hester Peirce and Elad Roisman, also fellow Commissioners appointed by Mr. Trump, recently protested the “steady flow” of climate and ESG announcements. They made a public statement asking, “Do these announcements represent a change from current Commission practice or a continuation of the status quo with a new twist in public relations?”
WHAT HAPPENS HERE
More prominent Democrats are leaving Governor Andrew Cuomo. Legislators such as spokeswoman Nancy Pelosi and representative Alexandria Ocasio-Cortez, to varying degrees, suggested that the governor of New York consider resigning on allegations of sexual harassment. He has declined those calls and is considering running for a fourth term.
The US is considering new ways to protect itself from cyberattacks. Efforts by China and Russia to break through government and corporate computer networks – and the failure of American intelligence agencies to detect them – have sparked discussions about ways to organize US cyber defense, including further partnerships with private companies.
Credit Suisse is accused of continuing to help Americans evade taxes. The Swiss bank helped clients hide assets seven years after promising the US federal prosecutor not to do so, a whistleblower report said. This endangers the company with a new investigation and further financial sanctions. The bank said it was cooperating with the authorities.
A veteran Democratic official is ready 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 payment processor has raised $ 95 billion in funding from investors such as Sequoia and Fidelity. Stripe plans to use the money to expand in Europe, including in the home country of its founders, Ireland.
Blockchain for the sub-bank
Brian Brooks, the former acting chief of the office of currency auditor, is really into blockchain. After all, he was the chief attorney for the Coinbase cryptocurrency exchange before joining the OCC. However, his excitement is based not so much on Bitcoin’s success as on his personal struggles, he told DealBook.
Mr. Brooks borrowed his way from a sick town. He grew up in Pueblo, Colorado, a steel center that lost its purpose in the 1980s. His father committed suicide when Mr. Brooks was 14 years old, and he and his mother had little. In high school, he waited for tables and took out loans for school, a car, and eventually a house. Now he’s betting that blockchain can help sub-banks do the same more easily.
“By unlocking credit availability, employees can climb the ladder.” Mr. Brooks said. Almost 50 million Americans have no credit scores, but many are creditworthy. Traditional rating systems are not equipped for fine-grained ratings, which can include rent, Netflix bills, or gig work income, for example. For many, the inability to borrow limits their ability to achieve financial security.
At the OCC, Mr. Brooks launched Project Reach, a financial inclusion initiative. His first step since stepping down from the agency in January is to join the board of fintech company Spring Labs as an independent director. DealBook is the first to report on it. Among other things, the company is developing more extensive data environments for credit assessment using blockchain technology.
Finding financial inclusion solutions that are immune to politics is criticalnoted Mr. Brooks, a Trump administration agent. Credit, he argues, lets people bet on themselves regardless of which party makes politics, and the current system excludes many worthy borrowers. “Let’s let more people climb ladders,” said Mr. Brooks.
“It’s just a pent-up cycle with nowhere for money to go, so it does stupid things.”
– Howard Lindzon, an investor, entrepreneur, and market commentator, talks to Erin Griffith of The Times about the booms (or bubbles) in everything from trading cards to Bitcoin, SPACs to so-called meme stocks.
Big Pharma Covid Booster
The pharmaceutical industry is very popular right now, which may not come as a surprise given that the end of the pandemic depends on Covid-19 vaccines. Drug manufacturers’ rapid response to the crisis has transformed public opinion of the industry, turning it from one of the most maligned to one of the most respected, according to new data from the Harris survey published exclusively on DealBook.
A year in fear created unlikely heroes. Over the past few years, the Harris poll has monitored public polls of more than 114,000 people. At the height of the emergency, more than half of those surveyed were afraid of dying from the virus and a similar proportion were afraid of losing their jobs. “It wasn’t until last month, when vaccines go up and hospital admissions and deaths go down, that fear subsides,” the report said.
The business received high marks during the pandemic. Many respondents cited companies as important in solving problems where they were previously seen as the cause of social problems. (Two-thirds said companies could coordinate vaccine rollouts better than the government.) Approval rates for many industries rose from January last year to February this year. Most of all, however, benefited from the reputation of the pharmaceutical industry – shaped by its role in the opioid crisis and criticized for high drug prices. In January 2020, only 32 percent of those surveyed rated the industry positively. At the end of last month that had almost doubled to 62 percent.
“The pharmaceutical industry’s ability to innovate and perform under pressure and in times of crisis is the ultimate endorsement for any business,” said John Gerzema, CEO of Harris Poll.
About big government and big tech
Silicon Valley has been hailed for decades as a hotbed of ingenuity, where companies like Google were born from the minds of entrepreneurs. On the latest episode of The Times’ opinion podcast “Sway”, economist Mariana Mazzucato told Kara Swisher that the traditional narrative has gaps.
“Do you have any idea where innovation came from in places like Silicon Valley?” asked Ms. Mazzucato, the founder of the Institute for Innovation and Public Purpose at University College London. She has ticked off technologies like the Internet and GPS: “Without the government-funded smart technology, we would not have a smart product.”
“It’s not that the private sector is doing nothing” She said. “It’s like government comes first, doing the heavy lifting and investing in the earliest high-risk phase – which is exactly the opposite of storytelling and narration.”
“We have to admit that value is created together” She said. “It didn’t just come about in business. The public sector itself is a value. “
Listen to the conversation here.
READ THE SPEED
French food giant Danone ousted Emmanuel Faber as chairman and CEO under pressure from two activist investors. (FT)
A Maryland hotel tycoon who has struck a deal to purchase The Baltimore Sun from Tribune Publishing can instead challenge Alden Global Capital for all Tribune newspapers. (NYT)
The value of short bets against SPACs has more than tripled since the start of the year. (WSJ)
Politics and politics
Jeff Bezos declined an invitation to speak at a Senate hearing on economic inequality that will include testimony from an Amazon employee involved in the union organization’s efforts in Alabama. (CNN)
With the pandemic not getting out of the way, President Biden is now making spending on infrastructure a priority. Can it happen to Congress? (FT)
Ant Group CEO Simon Hu resigned under pressure from Beijing’s Chinese fintech giant to overhaul its business. (NYT)
In a security filing, Elon Musk renamed himself “Technoking of Tesla” and the company’s CFO, Zach Kirkhorn, is “Master of Coin”. (SEC)
Tesla’s California factory recorded hundreds of Covid-19 cases after Mr Musk reopened the factory last May, according to the county. (WaPo)
The best of the rest
Peter Diamandis, the founder of the X Prize, held a personal conference that turned into a Covid-19 superspreader event. This was followed by a webinar promoting questionable treatments. (MIT Technology Review)
As the IPO of Coupang, an e-commerce giant, signals a possible weakening of South Korea’s traditional corporate elite. (Bloomberg)
Some at Goldman Sachs are reportedly frustrated with David Solomon’s leadership during the pandemic, including his criticism of remote working – while he has booked numerous short breaks himself. (Bloomberg)
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