Understanding the SEC’s Proposed Climate Rules: Part 2
Earlier this year, Professor Steve Cohen published a blog post detailing the potential updates that would be made to the Security and Exchange Commission’s (SEC’s) climate disclosure rule, and the ways in which Columbia’s M.S. in Sustainability Management program would adapt to the needs of this rule change by adding three new courses to the program’s elective list. These new courses — “Management of SEC Climate Disclosure Compliance,” “Understanding the SEC Rule: Disclosure Law for Non-Lawyers,” and “Climate Risk & Scenario Analysis” — are being designed to help our students understand the complexities and nuances of what these proposed rules will mean for the future of investing in a more sustainable world.
Sustainability Management (SUMA) staff and faculty have been working alongside professionals to design these courses so that they are as effective as possible. We reached out to the professors of these new courses so that they can share their own experiences as well as what they think the courses will have to offer in the wake of the proposed changes to the SEC guidelines. We are sharing their responses in a series of three blog posts so that you can get to know them better and get a peek at their new courses.
Last week we kicked off the series with an interview with adjunct professor Carolyn Kim Allwin. For the second part of this series, we will be hearing from Taylor Pullins and his new course, “Understanding the SEC Rule: Disclosure Law for Non-Lawyers.”
Taylor Pullins works at the law firm White & Case, where he is a partner in Global Environmental Practice and head of the ESG & Sustainability Specialty Practice. Many of his clients come from the energy industry.
Pullins’s work involves drafting and negotiating environmental terms and indemnity provisions in complex business transactions, including mergers, acquisitions, divestitures, project financings and security offerings. He has significant experience counseling clients on environmental permitting, enforcement defense matters, environmental litigation, internal investigations, and a broad range of environmental/regulatory matters affecting his clients’ operations. In addition, Pullins assists clients on complex policy and business decisions relating to evolving regulatory and societal expectations around climate change and other matters related to environment, social, and governance (ESG) practices.
All of these factors and more make him a perfect fit for teaching this new course in SUMA.
What initially motivated you to pursue environmental law?
I grew up in the western United States where water scarcity is a real concern. The frequent reminders of the need to preserve water resources were my introduction to both environmental law and principles of sustainability. Undergraduate coursework around Lake Tahoe and an introduction to the Keep Tahoe Blue campaign made strong impressions on me about the impacts from industrial water discharges. I became quite focused on learning more about the importance of responsible industrial operations and municipal planning.
Law school curriculum around environmental law has expanded and improved substantially since the time I was in school. Although the couple of courses I took introduced me to major federal environmental laws, it wasn’t until I spent a summer at a law firm after my second year that I learned what a career in environmental law could look like. To find an area of law in which I take strong personal interest was quite the refreshing revelation. Now I play a direct role in helping clients not only comply with laws, but also conduct their operations and planning in responsible, sustainable ways.
What do you think will be the impact of the proposed SEC guidelines for climate disclosures?
The SEC has proposed transformational rules regarding the disclosure of climate risks to public companies. When final rules are issued later this year, I predict they will be one of the more impactful rule changes of our lifetime. Normalizing disclosure of climate risks should lead to the operationalizing of improved practices by companies for managing climate and other environmental aspects of business.
What do you think the proposed guidelines signal for the future of investing in a more environmentally conscious world?
There will be winners and losers among public companies when it comes to the SEC’s climate disclosure rules. Since the SEC issued guidance in 2010 for disclosure of climate risks, many companies have included limited information about the risks of physical and transition risks from climate change in their SEC filings. During the same time period, companies have shared considerably more information about their operations in sustainability reports.
Sustainability reporting, which is not subject to the same regulatory scrutiny as SEC filings, tends to highlight positive aspects of companies when it comes to environmental performance. In some respects, companies use sustainability reports as part of their investor marketing efforts. With the issuance of final rules on disclosure of climate risks, public companies will be required to include substantially more information about climate-related risks that are reasonably likely to impact their business, operations or financial condition — including climate-related financial metrics that will be included in their audited financial statements. Put another way, investors will have before them in SEC filings substantially more information about how companies are managing the risks of climate change. Consequently, investors will be better equipped than ever to make investment decisions that align with their environmental priorities.
How will your course help sustainability professionals navigate these new guidelines?
Once finalized, the SEC’s proposed rules on disclosure of climate risk will constitute a landmark regulatory change. Sustainability professionals will benefit from a clear understanding of the public policy behind the rules and corporate drivers for compliance. This course is designed to aid sustainability professionals in understanding the complexity of the rules. Starting with a foundation of administrative law principles that underpin the US regulatory system, we will analyze case studies that demonstrate how companies have approached climate disclosure historically and changes required of them under the new rules. We will highlight areas that present challenges to certain sectors when it comes to showing meaningful improvements in emissions performance. We will also engage in a comparative analysis of climate and sustainability disclosure regulation in other key jurisdictions, including the European Union.
Laura Millar is a program manager for Columbia University’s Sustainability Management and Sustainability Science programs.