SEC Commissioner Hester Pierce, who came to the Commission from the Koch-funded, ultra-anti-regulatory Mercatus Center, the same person who informed the Council of Institutional Investors that their members did not know what it was that investors needed, is now speaking out against ESG disclosures, in a speech to Brookings. What is especially infuriating about Pierce and other Koch-funded operatives is that they rhapsodize about the purity of the free market but somehow always want to interfere when they get a chance to entrench established corporations and their executives.

The first misrepresentation comes right at the beginning

Front and center on our current regulatory agenda is whether and how we will move toward a more prescriptive ESG disclosure framework.

What is the word “prescriptive” doing in that sentence? The correct description of this issue is: Whether and how we can give investors better, clearer, and more consistent material information. Peirce loves to use rhetoric and cute analogies (the speech is called Chocolate-Covered Cicadas) to beg the question.

She makes three key points, all provably false.

“Thesis 1: ESG as a category of topics is ill-suited, and perhaps inherently antithetical, to the establishment of clear boundaries and internal cohesion.” The example she gives is not in any way related to the kinds of ESG disclosures investors have been asking for, and even if it was, this is exactly the kind of distinction the SEC is well qualified to make.

“Thesis 2: Many ESG issues lack a clear tie to financial materiality and therefore do not warrant inclusion in SEC-mandated disclosure.” As VEA Vice Chair Nell Minow pointed out in her comment, no one is asking for disclosures that are not material and indeed a potential rulemaking would be centered on determining how to get better material information about investment risk.

“Thesis 3: The biggest ESG advocates are not investors, but stakeholders.” On the contrary, the comments from investors overwhelmingly call for ESG disclosures. We’re not sure what she means by “biggest,” but if it is AUM, then the investors are the biggest, and as “the investors’ advocate” the SEC should take their concerns seriously. But what is truly appalling here is that Commissioner Peirce lashes out at providers of ESG data for self-interest without any acknowledgment of the self-interest of the “public interest” groups (as Nell Minow pointed out in her comment, some secretly funded by the Kochs and the fossil fuel industry) and by the corporate commenters themselves.

We would say this speech was disappointing, but it is what we have come to expect from Commissioner Peirce.