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The United States Securities and Exchange Commission (“SEC”) is reviewing sustainability. On April 13, 2016 the SEC issued a “Concept Release” seeking public comments on 340 topics relating to business and financial disclosure requirements for publicly-traded companies under Regulation S-K. See 81 Fed. Reg. 23916 (April 22, 2016) (“CR”). Several topics addressed the disclosure of company information relating to sustainability and public policy issues. Such issues, including climate change, resource scarcity, corporate social responsibility (“CSR”), and good corporate citizenship, are often referred to generically as environmental, social, and governance (“ESG”) concerns.  C.R., p. 206. The concepts of CSR and ESG overlap greatly if not entirely, and precise definitions of these terms are lacking. In this article, the terms “sustainability” and “ESG” will be used interchangeably in the context of corporate reporting. Many of the largest companies in the U.S. voluntarily publish annual sustainability reports and/or website ESG content. At issue is to what extent ESG reporting by publicly-traded companies should be required by SEC regulations.
Continue Reading The SEC Revisits Sustainability: Will Sustainability Reporting Become Mandatory for Publicly-Traded U.S. Corporations?

Next Monday, June 2nd is the deadline for all companies subject to the SEC’s conflict minerals rule to file their Form SD and, if necessary, their conflict mineral report.  We surveyed the filings made through May 28 and this blog highlights some of the good examples, and some less than optimal disclosure. A number of filings were made early today after our review, but if you are not one of the early filers, we hope you find our analysis helpful.
Continue Reading Early Conflict Minerals Filings: Good, Better, Best

Yesterday a panel of the D.C. Circuit Court of Appeals held the Conflict Minerals Rules’ requirement that a company that issues stock disclose if its products are not “DRC conflict free” violated the First Amendment.

In an effort to de-finance parties engaged in violence and human-rights abuses related to the extraction of gold, tantalum, tin, and tungsten—so-called “conflict minerals”—from Democratic Republic of the Congo, Congress, through rules promulgated by the Securities Exchange Commission, required companies to disclose not “DRC conflict free” in reports filed with the SEC and on the company’s website if they determine upon due diligence that their products contain such minerals.  On appeal of the district court’s ruling in National Association of Manufacturers v. Securities and Exchange Comm’n upholding the law, the Association challenged the SEC’s disclosure requirement as unconstitutionally compelling speech in violation of the First Amendment.
Continue Reading D.C. Circuit Finds Conflicts Minerals Rules’ Disclosure Requirement Unconstitutional; Affirms District Court’s Decisions on De Minimis Exception, Scope of Application, and Due-Diligence Trigger