+ Reactions to SEC climate pullback.
 

Sustainable Finance

Sustainable Finance

By Ross Kerber, U.S. Sustainable Business Correspondent

Corporate governance issues around SpaceX's pending IPO sound almost as futuristic as the company's talk of setting up a big colony on Mars. But in researching this week's newsletter I learned how debates around SpaceX's dual-class share structure go back a century to 1926 at least.

You can read more in my column this week, linked below. I've also included reactions to the end of a major climate-disclosure rule in Washington, and links to stories about two wins for labor.

Please follow me on LinkedIn and/or Bluesky. You can reach me via ross.kerber@thomsonreuters.com. 

Latest Headlines

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A&W Root Beer mascot Rooty the Great Root Bear, Wittenberg, Wisconsin, U.S.1988, photo by John Margolies. Retrieved from Library of Congress, https://www.loc.gov/item/2017709548/

A defense of dual-class shares, from root beer to SpaceX

The run-up to SpaceX's IPO, valuing the company at some $1.75 trillion, has something for everyone. Fans of SpaceX CEO Elon Musk will be captivated by the company's starstruck talk of human colonies on Mars while skeptics will note its $4.28 billion first-quarter loss and strategic challenges.

Both sides can agree this company is Musk's baby, thanks to a dual-class share structure and a Texas incorporation that leaves outsiders with little say. Big IPOs are always high stakes, and SpaceX's setup has renewed old debates about the merits of leaving insiders with outsized leverage of companies that raise money from public markets.

I got a taste of these arguments in the feedback to my column last month reviewing the retreat of the big investors like index fund firms from their advocacy of equal voting rights, sometimes referred to as "one share, one vote."

Bernard Sharfman, a research fellow with the Law & Economics Center at George Mason University's Antonin Scalia Law School, pointed out academic papers that came to different conclusions however. One of his own from 2022 looked at two decisions of S&P Global: its delayed inclusion of Tesla into the S&P 500 in 2020, and the 2017 decision to ban new multi-class shares from the index. Both decisions cost investors returns, he found.

 You can read the full column by clicking the button below.

Read my column here
 
 

A traveler walks into the Uber pick up zone at the Los Angeles International Airport's pick up terminal in Los Angeles, California, U.S., March 10, 2026. REUTERS/Caroline Brehman

Company news

  • In the first officially recognized union for U.S. gig workers, Uber and Lyft drivers in Massachusetts received a state certification to represent some 70,000 ride-share drivers.
  • In another win for labor, Samsung workers in South Korea voted in favor of a government-mediated pact that, rarely for a wage deal, provides them a fixed percentage of operating profit.
  • A group of eight Democratic U.S. state and city financial officials urged top credit-rating agencies not to narrow their risk analysis. Their message was in response to questions by Republican attorneys general in April about the agencies'  environmental, social and governance policies.
 

About that climate rule

The U.S. Securities and Exchange Commission said it will undo a dormant rule adopted under former President Joe Biden meant to help investors measure companies' climate-related spending and risks.

The move was no surprise but still seen as a setback by environmental groups who supported the requirement for publicly-traded companies to tell investors about climate related risks, emissions and spending. Here are some reactions to the change. 

  • David Arkush, director of Public Citizen's climate program: “Risks to investors and the public from climate change grow by the day, yet the SEC is backtracking on modest information disclosure for investors that would give insight on climate-related financial risks and greenhouse gas emissions. ... This proposed rule is yet another gift from the Trump Administration" to polluting industries.
  • Frank Sturges, senior attorney at the Clean Air Task Force: "“The SEC’s proposal to rescind its climate disclosure rule should raise serious concerns for investors about the future of market transparency in the United States. ... Throwing out the rule will move markets in the wrong direction and leave investors without the information they need.”
  • Richard Morrison, senior fellow, Competitive Enterprise Institute: The decision "is the best possible development for U.S. financial regulation. The SEC has now acknowledged that it lacks the statutory authority to issue such a rule, and that alone is reason enough for it to be rescinded as soon as possible. ... The rule would have required public companies to make subjective and disparaging disclosures about their own operations, created a rent-seeking bonanza for self-interested parties to the detriment of ordinary investors."