Gensler resigns, signaling rollback of climate initiatives at SEC
- Gary Gensler has stepped down as Chair of the SEC, indicating a potential shift in agency priorities.
- Under Gensler, the SEC worked on proposing climate-related reporting standards and focused on ESG regulations.
- The incoming chair is expected to reverse the green initiatives and standards developed during Gensler's administration.
In a significant shift for the U.S. Securities and Exchange Commission (SEC), Gary Gensler has resigned as Chair of the Commission. This exit is expected to facilitate a move away from the climate and environmental, social, and governance (ESG) initiatives implemented during the Biden administration. Since the signing of the Paris Agreement in 2015, various international measures have been implemented to address climate change and greenhouse gas emissions reduction. The SEC proposed new climate-related reporting standards in March 2022, reflecting its increased focus on ESG factors. Considerable changes in regulations were introduced during Gensler's tenure, including stricter scrutiny of funds claiming ESG alignment and proposed standards for climate reporting. However, the recent removal of ESG initiatives as an annual priority suggests that the SEC will now pivot its focus on enforcement rather than new initiatives. As Gensler's successor takes the helm, it is anticipated that there will be a systematic repeal of the climate-related directives established under his leadership, indicating a broader conservative shift within regulatory frameworks. This rollback has generated concern among climate activists who argue that stringent reporting requirements under international standards are vital for combating climate change. Nonetheless, opposition has been voiced particularly from former Trump administration officials, emphasizing the notion of business as usual as a counter to the push for a climate-focused economy. In summary, Gensler's departure signals a changing landscape for climate activism and governance in the U.S., raising crucial questions about the future of environmental regulations and corporate accountability regarding sustainability.