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As Regulators Turn Attention to ‘S’ in ‘ESG,’ So Does Big Law, The Legal Intelligencer

September 30, 2022

Partners Kelly Gibson and Erin Martin are featured in a The Legal Intelligencer article discussing how the US Security and Exchange Commission (SEC) could focus more on human capital disclosures as more companies include details about their workforce as part of their environmental, social, and governance (ESG) priorities. Kelly said that recent remarks from SEC Chair Gary Gensler instruct SEC staff to work on enhancing human capital accounting disclosure rules, which could have implications on what information a public company shares about its workforce in public filings.

“Investors want comparable and consistent disclosures, and right now, the S is sort of squishy,” Kelly said, referring to the “social” part of ESG.

Erin noted how such a requirement differs from the SEC’s existing practice—asking companies to include disclosures that describe human capital resources only if that information is material for investors to understand the company’s business.

“It is possible that public companies may receive additional scrutiny from the staff regarding their current human capital disclosure, such as additional questions about human capital metrics and measures, with the possibility for even more rulemaking in the future,” Erin said.

“Some companies’ disclosures are very fulsome about [diversity and inclusion], COVID-[19]-related and other workplace training policies, while others are more scant.”

Read the full The Legal Intelligencer article >>

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