Senior Fellow Richard Morrison reacted to the confirmation hearing of Gary Gensler to be SEC Chair:
“Chairman-designate Gensler’s prepared remarks for today’s confirmation hearing contain reassuring statements about how he will work to promote values like transparency and accountability, and goals like efficiency and fairness, in our capital markets. Missing, unfortunately, is a pledge to simplify and reform any of the Securities and Exchange Commission’s current system of regulation, and senators should question him extensively on these points.
“Gensler’s prepared remarks also omit any mention of a topic the Commission’s current head, acting chair Alison Herren Lee, has made a public priority – namely, mandatory disclosure of corporate information related to environmental, social, and governance (ESG) goals. I hope, if confirmed, chairman Gensler will exercise caution in so expanding the agency’s footprint, and heed the comments of his colleagues on the Commission, particularly Commissioners Hester Peirce and Elad Roisman, who have raised concerns about the lack of clear definitions and agency authority in this area.
“Some ESG proposals, in particular related to climate-related disclosure and climate finance, could turn the SEC’s statutory mission of investor protection and facilitating capital formation on its head. Suggestions that the federal government will attempt to choke off capital flows to disfavored development projects in the energy industry, for example, are particular concerning. The current administration is entitled to formulate and advance its own climate policy. But it should not expect an agency to reverse, by 180 degrees, the mission that was given to it by Congress.”