Statement by Lisa Woll, CEO, US SIF on the Anniversary of the Signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act

• By: admin
• On: 07/21/2016 17:26:04
• In: Policy

Today we mark the sixth anniversary of the signing of the Dodd-Frank Wall Street Reform and Consumer Protection Act. US SIF: The Forum for Sustainable and Responsible Investment (US SIF), along with our members and other organizations, worked to ensure that there was a meaningful government response to the financial crisis. Sustainable and impact investors focus on long-term investment and the generation of positive social and environmental impacts by the meaningful assessment of environmental, social, and corporate governance information in investment decisions. Among other achievements, Dodd-Frank has improved the material information available to all investors by mandating key corporate disclosures, which in turn helps to maintain fair, orderly and efficient markets and to facilitate capital formation. 

The past six years have seen progress from the Securities and Exchange Commission (SEC) in moving forward rules mandated by Dodd-Frank, including those related to the disclosure of minerals that come from the Democratic Republic of the Congo or neighboring countries in supply chains, executive pay ratios and the payments to governments by companies which extract natural resources.  These rules foster corporate accountability and enable investors to better assess certain investment risks.  

While we appreciate the SEC's efforts to translate legislative language into regulation, we are waiting for companies to begin implementing the rules, on disclosing their CEO-to-worker pay ratios and payments to US and foreign governments for the commercial development of oil, natural gas or minerals.

There have been efforts to roll back all or some of Dodd-Frank since it became law.  Recently the US House of Representatives passed bill H.R. 5485, the Financial Services and General Government Appropriations Act for fiscal year 2017.  This bill includes several amendments that dismantle key provisions of the Dodd-Frank Act, including limiting the SEC's ability to implement and enforce the conflict minerals rule, the pay ratio disclosure rule and the guidance relating to climate-change risks. One of the riders changed the structure and the funding of the Consumer Financial Protection Bureau (CFPB) essentially stripping it of its independence.  While the bill has not become law, it is an important reminder of how easily progress can be reversed.

At this anniversary, we look to a future that we hope will continue to build upon the advances made by the Dodd-Frank Act.  Investors have expressed overwhelming support for the sustainability disclosures provisions of the Dodd-Frank Act.  Efforts to weaken provisions under the Dodd-Frank Act roll back financial reform and are harmful to investors.