What’s “Controversial” About ESG? A Theory of Compelled Commercial Speech under the First Amendment
In a 2022 article entitled “What’s ‘Controversial’ About ESG? A Theory of Compelled
Commercial Speech under the First Amendment” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4118755), Sean Griffith illuminates ambiguities in First Amendment doctrine as applied to SEC disclosure mandates. He identifies the First Amendment doctrinal hinge as “controversy.” Rules compelling commercial speech receive deferential judicial review provided they are purely factual
and uncontroversial. Applied to securities regulation, Griffith argues that the compelled commercial speech paradigm requires the SEC to justify disclosure mandates as a form of investor protection. The Article argues that investor protection must be conceived on a class basis—the interests of investors qua investors rather than focusing on the idiosyncratic preferences of individuals or groups of investors. Disclosure mandates that are uncontroversially motivated to protect investors are eligible for deferential judicial review. Disclosure mandates failing this test must survive a form of heightened scrutiny. Griffith concludes that the SEC’s proposed climate disclosure rules fail to satisfy these requirements.