In the world of business, companies often have to share information about how they operate. This is called disclosure. But what information should they share? And who gets to decide?

Some people, like Paul Atkins, who used to be the head of a big US financial regulator, think companies should only share information that affects their money-making ability. He believes that things like environmental and social issues, often grouped together as ESG, might not be that important. He even thinks that rules about these things are just political trends that don't really matter to investors.

But is that really true? If a company says it's being eco-friendly but isn't, it could get into trouble. Just look at TotalEnergies, a big energy company. They were recently fined in a French court for making false claims about their environmental efforts. This shows that what companies say about their practices can have real consequences.

Moreover, ESG issues can affect a company's bottom line in many ways. For example, companies with good environmental practices might attract better workers, which can lead to better performance. So, even if not everyone cares about the environment, it might still be important for a company's success.

Atkins also argues that rules should not cater to shareholders who care about social or political issues. But what if these shareholders make up a big part of a company's investors? Shouldn't their concerns be taken into account?

There's also the argument that companies should focus solely on making money, and shareholders can use that money to support causes they care about. But this view has a flaw. It's often cheaper to prevent problems, like pollution, than to fix them later. So, it might be better for companies to act responsibly from the start.

The US financial regulator, the SEC, has a tough job. They need to figure out what information is important for investors and require companies to disclose it. But they should also recognize that different people care about different things. Dismissing concerns about social and environmental issues as just political is not the right approach. Instead, the SEC should consider all the ways that disclosure can affect investors and society and make decisions accordingly.

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