By now, any practicing securities lawyer who is not brain dead has heard the case for ESG disclosures repeated over and over and knows—like it or not—that they are coming. Yet, the existing literature to date has been dominated by economists, who argue, rather abstractly, that negative externalities are being imposed on society by firms whose profits are substantially enhanced by their continuing release of carbon emissions. For economists, this means that these companies must be forced to internalize their externalities through carbon taxes and other measures. At the least, they must be prodded by shareholders to achieve net zero emissions. But having once again "assumed the can opener," economists then move onto other problems, content that the solution for environmental issues is clear.

Lawyers are different. They have to deal with the messy problems of implementation. They know that carbon taxes are politically infeasible and that asking the SEC to curb negative externalities will be vociferously opposed by business groups who will claim that the SEC is seeking to require the disclosure of information that does not meet the traditional standard of materiality. "How dare the SEC try to save the planet at our expense," they are demanding. This issue of SEC authority boils down to the language of §13(a) of the Securities Exchange Act of 1934, which authorizes the SEC to require such information "as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security"—a standard significantly different from that of materiality, which is essentially only the standard for anti-fraud liability. Arguably, saving the planet is necessary or appropriate "for the proper protection of investors." Only a Supreme Court intent on dismantling the Administrative State could ignore this distinction, but unfortunately that only frames the question, rather than resolves it.