Investors urge the SEC to require mandatory sustainability disclosures
US SIF and ICCR issue a joint statement on the US Securities and Exchange Commission (SEC)'s concept release on business and financial disclosure requirements in Regulation S-K.US SIF and ICCR issue joint statement
US SIF: The Forum for Sustainable and Responsible Investment (US SIF) and the Interfaith Center on Corporate Responsibility (ICCR) have issued comments on the US Securities and Exchange Commission (SEC)'s concept release on business and financial disclosure requirements in Regulation S-K. Regulation S-K is a key regulation which mandates what information public companies must file with the SEC. US SIF and ICCR are advocating that information on environmental, social and governance (ESG) practices should be incorporated as part of required disclosure for public companies.
The two organizations collectively represent members across the United States with over $2 trillion dollars in assets under management.
Lisa Woll, CEO of US SIF, said: “The SEC Concept Release provides an important opportunity for sustainable and impact investors to weigh in on multiple disclosure questions. Issues related to sustainability disclosure are particularly critical because investors are increasingly integrating environmental, social and corporate governance (ESG) information into the investment process. According to US SIF Foundation research, professionally managed assets engaged in one or more SRI strategies grew by 76%, from $3.74 trillion to $6.57 trillion between 2012 and 2014. As a result, there is an increased demand from investors for corporate sustainability reporting; our members have been among the most persistent voices on this issue.
However, the lack of comprehensive, comparable and reliable data hinders investor efforts to most effectively incorporate ESG information into investment decisions. Investors need more disclosure in order to make informed decisions. We believe public companies should be required to report annually on a comprehensive, uniform set of environmental, social and governance indicators.”
Josh Zinner, CEO of the Interfaith Center on Corporate Responsibility, said: “In our comment letter to the SEC we make clear that mandatory disclosure related to sustainability issues is critical to create transparency for investors regarding a company's interactions with, and impact on, employees, communities and customers. Frameworks and processes associated with disclosing ESG information may help a company – and society – to mitigate future risks. For example, information about the human rights risks present in a company's operations and supply chain, as well as the management of those risks, is highly relevant information for an investor in assessing a company's performance and management approach in both the short- and long-term.
Poor management of human rights risks can lead to significant reputational, regulatory and litigation risk for a company and can have a material impact on financial performance. While voluntary measures have served an important role in providing increased ESG information to investors, this information is inconsistent across corporate sectors, and leaves investors with an unclear basis upon which to build our investment and engagement strategies. Greater disclosure requirements in Regulation S-K would ensure more consistent, reliable, comparable and verifiable ESG information that would allow for more informed investment decisions.”
The US SIF comment letter can be found here. The ICCR comment letter can be found here .
About US SIF: The Forum for Sustainable and Responsible Investment (US SIF)
US SIF 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. US SIF members include investment management and advisory firms, mutual fund companies, research firms, financial planners and advisors, broker-dealers, community investing organizations, nonprofit associations, and pension funds, foundations and other asset owners. US SIF is a member of the Global Sustainable Investment Alliance (GSIA). Learn more at http://www.ussif.org/.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 45th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for change. Our 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and academic institutions representing combined assets of over $200 billion with a record of corporate engagement that has demonstrated influence on corporate policies that further justice and sustainability. ICCR members engage hundreds of corporations annually in an effort to promote greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to both financial and health care services for communities in need. www.iccr.org