US SIF Affirms Support for the Dodd Frank Wall Street Reform and Consumer Protection Act
US SIF opposes changes to Sections 1502 on the Conflict Minerals Rule and Section 953(B) on the Pay Ratio Rule.Washington, D.C., March 7, 2017 - US SIF released the following statement from Lisa Woll, CEO:
“Today US SIF sent letters to the Securities and Exchange Commission re-stating our long held support for sections 1502 (concerning conflict minerals) and 953b (concerning pay ratios) of the Dodd Frank Wall Street Reform and Consumer Protection Act. Passage of Dodd Frank was a critical priority for sustainable and responsible investors. US SIF championed Dodd-Frank's efforts to combat the loopholes and weaknesses in regulation of US financial markets that led to the financial crisis of 2008 and which wiped out equity for individual and institutional investors.
“We are deeply disappointed that Congress has already voted to ‘disapprove' the SEC's rule on resource extraction payments which requires oil and gas companies to disclose payments made to foreign governments. Investors strongly supported this as it was a critical tool for deterring corruption.
“Investments incorporating environmental, social and governance criteria now account for $8.72 trillion of professionally managed assets in the United States. As a result, investors are demanding more disclosure on critical environmental, social and governance issues; Congress's action on resource extraction payment disclosure is a step in the wrong direction. We are equally concerned that SEC Acting Director Piwowar has reopened comments on already implemented rules on Section 1502 and Section 953b.
“Thus, US SIF has sent letters re-stating to the SEC our long held support for sections 1502 and 953b.
“Section 1502, the Conflict Minerals Rule, is intended to cease the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo (DRC) by requiring certain companies to trace and disclose the origin and supply chain of certain commodities mined in that country. While no single law can solve all the underlying problems causing conflict in the DRC, Section 1502 has diminished revenue flows to militia groups since 2010 and contributed to responsible economic development in the DRC. US SIF recently joined with more than 100 colleagues representing more than $3.75 trillion in assets under management, in opposing any changes to the conflict mineral rule.
“Section 953b, which came into force only on January 1 of this year, requires public companies to disclose the ratio of the median of the annual total compensation of all employees to the annual total compensation of the chief executive officer. The CEO-to-worker pay ratio can help investors better understand a company's overall compensation approach and provide a valuable additional metric for evaluating and voting on executive compensation practices. Issuers that provide excessive compensation to executives at the expense of other employees are creating risks that may be expressed in employee morale, productivity and turnover. The SEC should support this rule and allow it to yield results before it makes efforts to ‘re-open' it.
“It is no secret that President Trump has made the weakening or eradication of Dodd Frank a priority of his Administration. Such steps will harm the economy, investors and consumers. The attempts to eliminate and re-open disclosure rules at the SEC are first steps on the road to weakening Dodd Frank. We call on the SEC to maintain remaining rules on disclosure and urge Congress to oppose attempts to diminish or eliminate the Dodd Frank Wall Street Reform and Consumer Protection Act.”
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. 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 produces a highly regarded conference each year. A New Climate for Investing in Impact will be held in Chicago from May 11-12. Learn more at www.ussif.org.