BlackRock Inc.’s recent letter from founder Larry Fink is likely to provide momentum to two specific frameworks for sustainability and climate-change disclosure, the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD), helping to standardize the highly-fragmented reporting that exists currently.
That is according to an article published this week by Wachtell, Lipton, Rosen & Katz in the New York Law Journal, available here. “BlackRock, fiduciary of nearly $7 trillion in assets under management, is an enormously powerful force in corporate America,” Wachtell Lipton Partner David A. Katz and Consulting Attorney Laura A. McIntosh wrote in the article. “This governance initiative, if successful, ultimately could have two significant effects on the ESG disclosure landscape: It may help generate a consensus as to common disclosure standards and, more importantly, it may increase the relevance of ESG disclosures to investors by heightening the quality, consistency, and impact of the information provided.”
CorpGov published an article earlier this week highlighting the increasing relevance of the two frameworks. According to data from Sentieo, mentions of both SASB and TCFD in major SEC filings have spiked in the last two years.
Wachtell Lipton has been a strong advocate for ESG-related issues in recent years. Founding Partner Martin Lipton created a progressive approach to corporate governance called The New Paradigm, which focuses on how corporations can start running themselves better for the sake of all their stakeholders. Mr. Lipton’s interview with CorpGov discussing The New Paradigm is available here.
John Jannarone, Editor-in-Chief