SEC Climate Recommendation ‘Very Important’ for Business

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SEC voted yesterday sweep rule changes will require public companies to disclose climate-related risks and greenhouse gas emissions. While many have already reported some of this information, there are no mandatory standards that make it difficult for investors to compare data between companies.

“There’s an efficiency that comes from standardization,” SEC chairman Gary Gensler told reporters after the vote.

A new rule may take some time. The SEC gets public comment on the proposals for 60 days, and Gensler was reluctant to give a time frame for final adoption of a rule. “We’ll take the time it takes to fix it,” he said. Gensler expects a lot of input, judging from the flood of reactions last year when the idea of ​​forced disclosure first emerged. The agency may have to adjust its bid as a result. (You can read the entire 500-odd page of the offer. here.)

Gensler dismisses criticism of SEC’s overkill, and does not enter into a discussion about possible legal difficulties. “This is a disclosure regime within a long tradition of disclosure regimes,” he said, noting that the agency was responding to an investor request for more information on climate risks. But Hester Peirce, a Republican commissioner in the agency, vote against the proposal saying that he had “reversed the disclosure regime”, “how can he regulatorsThey expect a range of non-investor stakeholders to run their companies by making their bids.” Deputies also intervened:

  • North Carolina Representative Patrick McHenry, the top Republican on the House financial services committee, said he rejected an effort to solicit information that was “non-important to most companies.”

  • But Rhode Island Democratic Senator Sheldon Whitehouse said the SEC didn’t go far enough because the proposal didn’t include statements about “climate lobbying and influencer activities,” which he called “the most important statements a company can make.” climate security.”

“This is a crucial moment for business and stakeholders” Former SEC chief accountant Wes Bricker, now with PwC, told DealBook. He said many companies voluntarily report climate-related information, but without a consistent set of mandatory disclosures, there are concerns about the greenwashing and completeness of the information. “This raises the bar for all companies,” Bricker said.

Judge Ketanji Brown Jackson pledged to be independent. Over first day of confirmation hearings In the Senate, President Biden’s Supreme Court nominee said he would not depend on ideology. Republicans attacked his record as a public defender.

Lenders seized over $2 billion in Evergrande assets. Banks are claiming their rights to money held in a subsidiary of the troubled Chinese real estate developer, internal review raised red flags. Evergrande said it would delay the release of its annual financial results due to ongoing audit work.

Nickel trading resumes when the market begins to stabilize. Trading on the London Metal Exchange stayed within limits Determined by the market after high volatility has led to shutdowns and false starts in recent weeks. Prices continue to drop, indicating short-term squeeze stopping trading decreasing.

US Covid vaccine rates have stalled. About a quarter of eligible adults are unvaccinated, and half have not received booster vaccinations due to the relaxation of pandemic restrictions. easing demand for vaccines.

WTO chief calls for “reglobalization” to alleviate supply chain woes. Ngozi Okonjo-Iweala, executive director of the organisation, said: to include more countries in international production networks It can eliminate the shortcomings that drive prices up.

When Archegos Capital Management, a little-known investment firm, was blown up by bad bets last year, it scrambled stocks and cost banks billions. The firm had used swaps, a type of derivative, to hide its massive positions, and the SEC responded by proposing new rules to prevent something similar from happening again. An unconventional coalition of labor activists, professors, corporate law firms and hedge funds oppose the proposal. Maureen Farrell reports from the Times.

What is the recommended rule? Swaps are one of the ways hedge funds and other large investors create positions in companies without making others aware of their interests. Under the SEC’s new rule, investors who use swaps to create large positions in companies will have to disclose those trades within one day after making them. (Large investors who buy shares directly have 10 days to disclose their positions.)

Why are people against it? Activist hedge funds using swaps say earlier disclosure would allow companies to use methods to discourage them from buying shares. Alerting the market to trades will increase the price of a company’s stock and make it more expensive to buy a stock large enough to have influence over a company’s strategy. Labor advocates say the swap rule will also make it harder for unions to use pension fund investment to force changes. received by the SEC More than 1,200 comment letters About the proposed rules, a sign of depth of feeling on the subject.

The Federal Reserve has a dual mandate: It must support maximum employment growth, while keeping inflation low by not letting the economy get too hot. It’s a difficult balance.

A little over a year ago, Fed chairman Jay Powell seemed willing to let inflation rise. for the labor marketnotes that low- and middle-income workers benefit most from long-term expansions. powell noted He said the majority of Fed officials had not expected a rate hike for years.

“We will not tighten monetary policy only in response to a strong labor market” Powell said in February last year.

Fast forward to today, where inflation is stubbornly high and job gaps are large. Now, Powell said the Fed would consider making mistakes on the side of the US. raise rates higher and faster more than expected to reduce inflation.

“There is a clear need to act quickly to return the monetary policy stance to a more neutral level” Powell said yesterday that if inflation does not fall, it may be necessary to raise rates to “more restrictive levels”.

Bond yields rose sharply after Powell’s comments, reflecting concerns about the Fed’s ability to make a so-called soft landing where inflation was brought under control without a spike in unemployment. Indeed, Powell accepted this challenge.

“No one expects a soft landing will be easy” said.

Rescuers comb the slopes in a remote part of southern China. looking for survivors A plane with more than 130 people on board, operated by China Eastern Airlines, crashed yesterday. Boeing 737-800 NG rapidly losing altitude about an hour into the flight, and it could take weeks or even months for investigators to determine what caused the crash.

This Final mess for Boeing and another test for CEO David Calhoun, who, after more than a decade on the board, built a brand as a leadership and crisis management guru before becoming CEO of the aircraft manufacturer.

Crash, another setback for BoeingHaving trouble with two of its flagship models, the single-aisle 737 Max and double-aisle 787 Dreamliner. The 737 Max has been flightless around the world for over a year after two fatal crashes in late 2018 and early 2019. It replaced the 737-800 NG, the horsepower of the skies, which accounts for about one-fifth of passenger aircraft in service worldwide. Production delays for the Dreamliner caused Boeing $4.2 billion in losses last quarter.

It could be a blow to Boeing’s business in China, which has been struggling lately. While Max was allowed to fly again in the US and many other countries, China only gave approval in early December, and his return to the skies there may be delayed by yesterday’s crash. Boeing delivered nearly a dozen aircraft to Chinese buyers last year, while Boeing’s main competitor, Airbus, delivered more than 140 aircraft.

A former senior executive of GE, Calhoun has a reputation for crisis management.guiding a number of companies through difficult times. He took over as Boeing’s CEO after the Max collapse and guided the company through the pandemic that had hit the company’s finances hard. Boeing’s stake also lagged behind Airbus during Calhoun’s tenure, but received positive reviews. Last year, the company raised the mandatory retirement age from 65 to 70 so that 64-year-old Calhoun can continue as chef.

“Dave Calhoun has been consistently prepared for leadership roles based on his competence and character,” Yale management professor Jeffrey Sonnenfeld told DealBook.

Opportunities

  • Alibaba’s beleaguered share price soared after it announced plans to buy back $25 billion in shares. (CNBC)

  • Switch, a data center operator with a market capitalization of $7 billion, has hired advisors and is reportedly considering a sale. (Bloomberg)

  • The shortlist of bidders competing to buy Chelsea FC football club will reportedly be reduced to three after the Russian owner came under British sanctions. (Reuters)

  • A Saudi pharmacy chain’s blockbuster IPO highlighted how listings in the oil-rich country are challenging pessimism in other markets. (Bloomberg)

Policy

  • The DC attorney general has sued Grubhub, accusing the food delivery service of hidden fees and deceptive marketing practices. (Protocol)

  • Here are five takeaways from the most recent campaign donation statements. (politics)

  • A Black homeowner is suing Wells Fargo in federal court, alleging that the bank’s lending algorithms are based on a racist history of refusing to provide refinancing for Black borrowers. (NYT)

best of the rest

  • Places at private schools in Singapore are scarce as families flock from Hong Kong to avoid pandemic restrictions. (FT)

  • “Bitcoin Miners Want to Reinvent Themselves Eco-Friendly” (NYT)

  • Do global teams see diversity and inclusion as a uniquely American issue? (HBR)

  • Why did the second largest cryptocurrency purposely destroy $6 billion of its supply? (Luck)

  • “I Think I Just Solved Daylight Savings Time” (Times Opinion)

We want your feedback. Please email your thoughts and suggestions. dealbook@nytimes.com.

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