US SIF Commends New Payment Disclosure Rule for Resource Extraction Companies
US SIF issues statement in response to the long-awaited new rule on the disclosure of payments by publicly-traded companies that extract natural resources, as required by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
WASHINGTON, D.C. - US SIF: The Forum for Sustainable and Responsible Investment
issued this statement today in response to the long-awaited new rule on the disclosure of payments by publicly-traded companies that extract natural resources, as required by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the rule, companies listed on US stock exchanges are required to make annual disclosures, by project, to the Securities and Exchange Commission (SEC) about their payments to US and foreign governments for the commercial development of oil, natural gas or minerals. Companies are required to begin reporting payments for all fiscal years ending after September 30, 2018.
Lisa Woll, CEO of US SIF, said:
“We applaud the SEC for releasing a strong payment disclosure rule covering companies' commercial development of natural resources. US SIF has worked closely with a broad coalition of investors and civil society organizations to urge the SEC to enact this rule since the Dodd-Frank Act became law six years ago. We thank SEC Chair Mary Jo White, the Commissioners and staff for their hard work in finalizing a strong rule.
“The new rule will foster corporate accountability, enable investors to better assess certain investment risks and benefit the citizens of resource-rich countries, who often cannot find reliable data on the payments their governments receive for mineral, oil and gas extraction rights.
“US SIF and investors representing trillions of dollars in assets under management believe that the disclosures benefit all investors by yielding material information, which in turn helps to maintain fair, orderly and efficient markets and to facilitate capital formation. As a result of the rule, investors will be able to compare the payments that resource companies make to governments around the world, and analyze whether these payments or operations pose regulatory, tax, reputational, political and social risks. The promulgation of this rule has therefore been a high priority for US SIF.
“We believe that the rule strikes an appropriate balance between providing useful information to investors and providing companies with flexibility in its implementation. While we are disappointed to see a one-year reporting delay in disclosing payments related to exploratory activities, we are pleased that the rule requires robust public, project-level disclosure of payments including taxes, royalties, fees (including license fees), production entitlements, bonuses, dividends, payments for infrastructure improvements and, if required by law or contract, community and corporate social responsibility payments. We are also pleased to see that the new rule aligns with the payment transparency rules in other countries, including those adopted in the European Union and Canada. We encourage companies involved in the extraction of resources to begin reporting their payments to governments even before the regulatory deadline.”
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About US SIF
US SIF: The Forum for Sustainable and Responsible Investment is the leading voice advancing sustainable, responsible and impact investing across all asset classes. Our mission is to rapidly shift investment practices towards sustainability, focusing on long-term investment and the generation of positive social and environmental impacts. Among the hundreds of US SIF members are investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, community investing institutions, non-profit associations, and pension funds, foundations and other asset owners.
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Manager of Communications and Events
US SIF: The Forum for Sustainable and Responsible Investment
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Washington DC 20013