A three-judge panel for the U.S. Court of Appeals for the Fifth Circuit seemed open to the arguments made by Texas and other Republican-stronghold states contesting the Securities and Exchange Commission (SEC) rules on fund vote disclosures concerning Environmental, Social, and Governance (ESG) proposals during company annual meetings.
The politically conservative states are asserting that the SEC overstepped its legal bounds and did not give proper justification for the costs associated with the enforcement of these rules. The states posit that the rules appear to discourage investment in certain industries, notably oil companies and other businesses regarded unfavourably by ESG activists.
In a session held on Tuesday, the focusing subject of discussion amongst the circuit judges was the actual costs of implementing the rule. Further details of their discussions remain undisclosed.
Original coverage of this story can be read in full at Bloomberg Law.