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Richard Brooks's picture
Co-Founder and Lead Software Engineer Reliable Energy Analytics LLC

Inventor of patent pending (16/933161) technology: METHODS FOR VERIFICATION OF SOFTWARE OBJECT AUTHENTICITY AND INTEGRITY and the Software Assurance Guardian™ (SAG ™) Point Man™ (SAG-PM™)...

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  • Sep 24, 2021 2:23 pm GMT
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This is BoD level information regarding the likelihood that environment, social and governance (ESG) reporting will become a requirement. Let me save you some time:

CORPORATE GOVERNANCE IMPROVEMENT AND INVESTOR PROTECTION ACT

The ambitious Act is wide ranging and includes eleven titles that address various areas of corporate disclosures including: ESG disclosures, shareholder political transparency, accountability in pay, climate risk disclosures, disclosure of tax havens and offshoring, workforce investment, preventing and responding to workplace harassment, cybersecurity disclosure, governance through diversity, disclosure of the use of forced labor, and other matters.

Despite a low likelihood of passage, the Act certainly signals to the recently appointed SEC Chairman Gary Gensler the expectations of the majority in Congress. What follows in this article is an examination of potential steps the SEC may take, even if the Act does not pass

Utility Dive also provides some coverage on this topic:

Even before the power crisis, markets had already begun to favor companies that demonstrated ESG leadership. NextEra Energy and the AES Corporation, for instance, have acted on high-profile ESG commitments which tie into their respective financial strengths. Both companies have outpaced the utility industry's growth over the last two years.

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Bob Meinetz's picture
Bob Meinetz on Sep 24, 2021

Dick, As hard as I try to be optimistic about well-intended legislation like this,
it all comes down to whether it's possible to "create clear criteria to measure corporate social accountability", and whether allowing "companies to ascertain whether certain risks are material" doesn't effectively put a legislative stamp of approval on corporate marketing that may be entirely without merit.

Getting legislators to agree on how to measure social accountability will likely doom any possibility of the bill becoming law, and that's probably a good thing. I don't see any value to investors, or customers, in allowing corporations to evaluate how nice they are, and if they've been naughty, how they will try to be nicer in the future. Enact a carbon tax. For natural monopolies, eliminate self-dealing. Close tax loopholes. These are the kinds of bills that will make social responsibility enforceable - and not a self-virtue free-for-all, where the accused get to decide whether they're guilty or innocent.

Richard Brooks's picture
Richard Brooks on Sep 24, 2021

Bob, I always appreciate your feedback and insights, in spite of our difference of opinion on some topics.

I believe we agree on the need for nuclear power as a means reduce carbon emissions.

I believe we disagree on carbon taxes to achieve the same goal.

ESG covers some areas that may be difficult to unambiguously identify and report on, however some aspects of ESG, i.e. reporting of cybersecurity breaches are very easy to identify and report on, and that information may be important/interesting to investors, IMO.

Bob Meinetz's picture
Bob Meinetz on Sep 25, 2021

I should have been clearer: "enact a revenue-neutral carbon tax", aka fee-and-dividend. Do you oppose that type?
Seems like we've had this discussion before. If the tax is revenue-neutral, it will put no added burden on lower-income residents - they'll actually make money (unless they have a long commute).

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