The SEC: Who’s who at the biggest US regulator and what does it mean for ESG?

Biden’s appointment of Gensler as SEC Chair isn’t the only move. As the agency gears up for a sustainable finance drive, Paul Hodgson takes a look at who else is behind the wheel.

The US Senate confirmed Gary Gensler as the new Chair of the Securities and Exchange Commission (SEC) last month, but that isn’t the only change of senior staff at the financial regulator. As the agency pushes hard on ESG and climate risk – launching a body to police ESG claims, checking on firms to see if they are complying with climate disclosure expectations and throwing its hat into the ring to develop sustainability-related corporate disclosure standards – the Biden administration has already named a new acting Head of Corporate Finance, Chief of Staff and Head of Enforcement, as well as its first official ESG role. 

Gensler announced some of his new senior staff members a few weeks ago – some of whom were first appointed under acting chair (now Commissioner) Allison Herren Lee in February. These are some of the key names that will be driving the ESG agenda forward at the SEC.  

In possibly the biggest signal that he will pursue progressive policy goals, Gensler appointed Heather Slavkin Corzo as his Policy Director. Well-known in US governance circles, Corzo made her name in trade unions, and is ex-Director of Capital Markets Policy at The American Federation of Labor and Congress of Industrial Organization. Alongside that role, she served for nearly three years as Head of US Policy at the Principles for Responsible Investment (PRI). PRI’s CEO, Fiona Reynolds, said that – during her time in the role – Corzo had “pushed back against the previous administration’s policies at the Department of Labor and SEC that had a chilling effect on ESG integration and limited the ability of shareholders to exercise their rights in the proxy process. She also worked to educate policymakers on the potential financial impacts of ESG issues.” She has been a long-standing champion of workers’ rights and advocate for pay equity at listed companies. Corzo remains a member of the Advisory Group for the OECD project on Responsible Business Conduct in the Financial Sector and, in her new role at the SEC, will advise Gensler on rulemaking. 

The SEC’s other big appointment in ESG terms is Satyam Khanna. Back in February, the agency created a brand new position: Senior Policy Advisor for Climate and ESG. Khanna, who has taken it on, is another of the PRI’s alumni. Before an eight-month stint as Senior Advisor at the UN-backed body, he worked as Senior Legal Advisor to then-SEC Commissioner Robert Jackson, who had taught him at Columbia Law School. He returned to the SEC last summer as a member of the Investor Advisory Committee, advising the regulator on ways to protect investor interests, with a particular focus on corporate governance and disclosure. Alongside this, Khanna was a Resident Fellow at the New York University School of Law’s Institute for Corporate Governance and Finance, and served on the Federal Reserve, Banking, and Securities Regulators Agency Review team for the Biden-Harris Presidential Transition.

At the time of his appointment, Lee said: “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.” Khanna’s role will be to advance new ESG initiatives throughout the SEC.

Also in February, it was announced that former member of the SEC Investor Advisory Committee, John Coates, would be Acting Director of the Division of Corporation Finance. Already, he has been very vocal about his belief that “the SEC should help lead the creation of an effective ESG disclosure system”. He also believes it “can and should play a leading role in the development of a baseline global framework that each jurisdiction can build upon to address its individual needs”. While serving on the Investor Advisory Committee, Coates was on the faculty of Harvard Law School. Before that, he was a partner at corporate law firm Wachtell, Lipton, Rosen & Katz.

Melissa Hodgman has stepped in again to work as the Acting Director of the Division of Enforcement, after the resignation of Alex Oh last month. Hodgman had already served as Acting Director from January to April, having worked in a number of departments at the agency since 2008. Lee described her as “a leading voice in the Division on critical issues of diversity, hiring, and labor-management relations”. Her new role will see her temporarily in charge of investigations into violations of federal securities laws, prosecuting civil suits in federal courts, as well as its administrative proceedings.

Other senior figures on the investor side at the SEC remain, such as Rick Fleming, who continues as the SEC’s Investor Advocate – the first person to hold the position when he was appointed in February 2014.