Understanding the SEC’s Proposed Climate Rule: Part 1
Carolyn Kim Allwin, an adjunct professor in Columbia University’s Sustainability Management Program, will teach the “SEC Climate Disclosure Compliance Management” course this fall.
Earlier this year, Prof. steve cohen published a blog post Details potential updates to the SEC’s climate disclosure rules, and how Colombia’s climate disclosure rules will work MSc in Sustainability Management The program will accommodate this rule change by adding three new courses to the program’s elective list. These new courses—”SEC Climate Disclosure Compliance Management,” “Understanding SEC Rules: Non-Attorney Disclosure Law,” and “Climate Risk and Scenario Analysis”—are designed to help our students understand these Complexity and nuance of content. These proposed rules have important implications for future investments in a more sustainable world.
Sustainability Management (SUMA) staff and faculty have been working with professionals to design these courses to be as effective as possible. We reached out to the professors of these new courses so they could share their experiences and what they think these courses will offer following the proposed changes to the SEC guidance. Over the next few weeks, we will share their responses in the following ways: Series of three blog posts This way you can get to know them better and learn about their new classes.
First, we’ll hear from Carolyn Kim Allwin about her new course, “SEC Climate Disclosure Compliance Management.” (Stay tuned for Parts 2 and 3.)
Carolyn Kim Allwin is the US ESG Director for Capco, a global technology and management consulting firm that specializes in driving digital transformation in the financial services industry. She helps companies navigate regulatory changes and implement efficient cross-border tax planning strategies.
Prior to joining Capco, Allwin served as Chief Sustainability Officer for Recap Investing, Associate Legal Counsel for GoldenTree Asset Management and Consultant for Ernst & Young. Allwin is a venture partner at Clearstone, which invests in high-impact startups that aim to reduce barriers to upward mobility for low-income individuals.
Her many years of professional experience in the field of sustainable development will be invaluable to students on this programme.
What initially drew you to environmental finance?
When I was young, I wanted to save the world and make it a better place. I figured I could do that by becoming a lawyer – I could give voice to marginalized communities, make money, and then give back through philanthropy. But that’s not enough for me. I realized my life and career needed more meaning. I’m curious about how best to use and contribute my skills to help catalyze more capital impact – especially in the nascent field of sustainable investing.
That was over a decade ago, and I still rejoice every day at the opportunity to contribute my expertise and experience in the financial services industry to the development of sustainable investing. At this point in my career, I carefully consider how each new opportunity will add to my cumulative impact on the world for our children, their children, and future generations. I call this phase of my career the “generational impact creation” phase.
The teaching opportunities I have had have been incredibly satisfying and rewarding as I have had the opportunity to provide the next generation of sustainability leaders with the knowledge, information and practical knowledge to navigate the rapidly evolving ESG environment. [Editor’s note: ‘ESG’ refers to a company’s environmental, social, and governance practices as markers of social responsibility.]
As the ESG/sustainability field develops, what challenges do you foresee in this field?
The most challenging part of this field is that it’s an emerging field and its development is very ad hoc — but that’s what makes it so exciting. Sustainable investment practices across all asset classes are maturing faster than the frameworks around them can keep up. No single ESG centrifuge is going to drive this industry, so we’re making rules or regulations. Therefore, there is no measure of success. We are at a stage where regulators such as the SEC and the Federal Reserve are trying to introduce metrics to increase transparency to harmonize data and reporting. The US Securities and Exchange Commission has also recently begun cracking down on ESG initiatives, imposing fines for “greenwashing”. It’s been interesting to see the maturation of the space, and I think any organization trying to enter the space should take the time to figure out what ESG means to them and how and where they really fit into it. But this is the natural evolution of the industry, and with challenges comes opportunities.
What do you think will be the impact of the SEC’s proposed climate disclosure guidelines?
From the ground up, the knock-on effect could revolutionize the sustainable investing industry. First and foremost, this is the first sign that the federal government intends to make sustainability reporting mandatory. Therefore, it will force companies to devote more time and resources to sustainability reporting. Reporting will become more harmonized, increasing the reliability, comparability and transparency of all sustainability reporting. It will help to clean up the data that investors, shareholders, executives and all stakeholders use to make decisions. Investors will find it more beneficial and make decisions based on some environmental, social and governance information. Because of this impact on the cost of capital, companies will want to continue to strengthen their sustainability reporting. Ultimately, I believe sustainability reporting can achieve the same level of sophistication as financial reporting standards.
How will your course help sustainability professionals navigate these new guidelines?
Our courses will provide students with the tools and knowledge they need to become solution-oriented experts in the field. First, as sustainability advocates within organizations, students should become internal experts on how existing regulatory regimes (mandatory and non-mandatory) will affect the company’s short- and long-term impact. Building on this foundation, we will help prepare the next generation of sustainability leaders with a pragmatic first-year implementation plan. Aligning stakeholders from legal, finance, client-facing, risk and sustainability teams is critical to designing, managing and implementing new processes and procedures.
These are the principles I employ in times of regulatory change and uncertainty, and the most important advantage our students can have as emerging sustainability leaders is to ensure that all of the first, second and third lines of business party’s maximum participation. Ensuring the participation and investment of all parties is critical to delivering accurate and transparent sustainability reporting.
Laura Millar is a Program Manager for Columbia University’s Sustainability Management and Sustainability Science Program.
