By: Fran Seegull

Originally Published In ImpactAlpha’s Policy Corner On July 11, 2024. Read The Article Here.

Impact investing is at a crossroads and in the crosshairs. That is a dichotomy we continue to revisit in our work to grow the practice of impact investing for a more sustainable, equitable economy.

Our field has grown exponentially and entered the mainstream, with the flourishing of funds incorporating ESG, sustainability and impact. There is growing recognition that issues like climate risk are synonymous with financial risk.

A suite of recent Supreme Court decisions will create regulatory uncertainty with significant implications for the private sector and stability of the capital markets.

On Friday, a Supreme Court decision was announced, overturning a longstanding legal standard known as Chevron deference, which enabled federal agencies and their subject matter experts to interpret ambiguous statutes.

The undoing of this doctrine is expected to lead to inconsistencies across the lower courts, if some strike down and others uphold the same regulatory guidance. In turn, businesses and investors would be forced to contend with years of inconsistent and unreliable guidance, as the courts work to resolve potentially conflicting regulatory standards across states.

In partnership with B Lab U.S. & Canada and over 50 investor, business and philanthropic organizations, the U.S. Impact Investing Alliance sent a letter to SEC Chair Gary Gensler urging movement on the long-awaited rulemaking on corporate human capital management (HCM) disclosures. 

Investors are increasingly demanding clear, consistent and comparable information on material considerations such as a company’s workforce composition, compensation, health and safety, and diversity practices. In response to calls from investors, we encourage the Commission to pursue a comprehensive set of HCM disclosure requirements including universal quantitative and supplementary qualitative and information.