April 23, 2022
Whether we admit it or not, climate change is a reality that we must face. I believe it would be wise for investors to be more knowledgeable in the actions of the companies they have stake in. However, I do not feel the government is in a position to regulate what companies investors are able to invest in. The tension that I feel the SEC must find a balance to is facilitating transparency between companies and their stakeholders while not imposing regulations on companies that restrict their operations. Obviously, there is a level of environmental governance that is responsible for companies to abide by, I believe that the SEC should be careful that the proposed regulations simply allow investors to support companies they believe to be responsible. It would be an overstep for the SEC to set environmental standards.
I believe that the proposed rules will lead to more jobs as more companies find both in-house and outside personnel to help navigate the new rules and begin implementing new policies to ensure environmental responsibility. Within the oil and gas industry, there is already a push from investors for more ESG policies, and some would argue that it is not necessary for the government to get involved. If this proposed rule is approved, I believe that it will continue to change the industry, but I believe the industry is already working in the right direction. Obviously, having to report the emissions of suppliers will be interesting to see. Especially for refining companies, but again I believe the industry is already working toward improvement.
The biggest question is, will this really affect the way investors use their money. I think in some cases yes. In others no. For hedge funds, I believe they will be more scrupulous when looking to invest in companies. They are answering to big investors and also have their own image to worry about. For small traders, I do not know if environmental disclosures will have a huge effect. Again, in both of these instances, I believe we are already seeing this without the government being involved.