Regressing into Progress by SEC Commissioner Peirce

On June 5, 2025, SEC Commissioner Hester M. Peirce delivered remarks entitled "Regressing into Progress", before the International Center for Insurance Regulation Digital Insurance Forum.

Commissioner Peirce said, the "... ESG era, though marketed as progress, has harmed investors, companies, regulators, and society. Nothing is new about companies and investors taking a wide range of factors into account in deciding how to allocate capital. The materiality framework of our U.S. securities regulatory regime elicits disclosure about issues determinative to a company's long-term financial value, including, when applicable, ESG issues. Our framework distinguishes between what is material to an investment decision and what is not material even though some investors might care deeply about it. Only the former warrants mandatory disclosure."

She went on to say that "the distinctive element that marks this new era is the presumptive categorization of anything bearing the ESG label as inherently material to long-term financial value. In doing so it departs from a near-century-old materiality-based disclosure regime."

Peirce claimed that "ESG initiatives—even when couched in terms of disclosure—attempt to shift capital flows to uses favored by politicians, regulators, and powerful interest groups as embodied in the taxonomies that drive corporate and investor activity. These favored industries and companies are more likely to correspond to lobbying prowess than to the ability to improve society."

Commissioner Hester M. Peirce: "The distinctive element that marks this new era is the presumptive categorization of anything bearing the ESG label as inherently material to long-term financial value."

She claimed that the other responsibilities that regulators must handle have suffered from the attention given to ESG, saying "ESG initiatives coming from every level of government and reinforced by grifting, silver-tongued sustainability sirens consume tremendous amounts of corporate resources."

Peirce noted that a movement away from ESG initiatives is happening domestically and in Europe, which appears to be looking at its ESG regulatory framework with an eye toward streamlining it.

The full speech is HERE