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SEC Creates New Senior Role Focused on Climate Change, ESG

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In yet another sign of the growing importance of environmental, social and governance factors in investing, the Securities and Exchange Commission has created a new position in the office of Acting Chair Allison Herren Lee focused on those issues and appointed Satyam Khanna, a former senior legal counsel to former SEC Commissioner Robert Jackson, to fill it.

As the senior policy advisor for climate and ESG, Khanna will advise the agency on ESG matters and advance related new initiatives across its offices and divisions, according to the SEC.

He was most recently a resident fellow at NYU School of Law’s Institute for Corporate Governance and Finance and a member of the Biden-Harris transition review team for the Federal Reserve and banking and securities regulators, including the SEC. Gary Gensler, President Joe Biden’s pick to head the SEC, had chaired that transition review team.

Khanna also previously served on the SEC’s Investor Advisory Committee and was a member of the committee’s Member of the Investor-As-Owner subcommittee. Earlier, he was an advisor to the Principles for Responsible Investment, which is dedicated to understanding the investment implications of ESG factors and supporting investors in incorporating ESG factors into their investment decisions.

“I am thrilled that Satyam is returning to the SEC to oversee and coordinate the agency’s efforts related to climate risk and other ESG developments, issues of great significance to investors and the capital markets,” said Acting Chair Allison Herren Lee in a statement. “Having a dedicated advisor on these issues will allow us to look broadly at how they intersect with our regulatory framework across our offices and divisions.”

Lee has stressed in recent speeches the growing need for “uniform, consistent and reliable disclosure” about climate change risk from public companies, which would help provide clearer disclosure from funds invested in those companies.

Steven M. Rothstein, managing director of the Ceres Accelerator for Sustainable Capital Markets, noted on the organization’s website and in a tweet that the SEC’s new position and Khanna’s hiring is “a critical step forward on the path to mandating climate risk disclosure and addressing climate change as a systemic financial risk.”