Press Release
Social Investment Forum: SEC Climate Action “Important First Step” Toward Broader Sustainability Reporting For Investors
CONTACT:
Patrick Mitchell, (703) 276-3266 or pmitchell@hastingsgroup.com
WASHINGTON, D.C. |
January 27, 2010 |
The 400-member Social Investment Forum (SIF), the U.S. membership association for socially and environmentally responsible investment professionals and institutions, today applauded the U.S. Securities and Exchange Commission (SEC) for its decision to issue definitive guidance to companies on disclosing climate change risks to investors.
SIF CEO
In addition to applauding today’s development, SIF and its members welcomed the SEC’s decision in October to clarify for companies that they could no longer omit shareholder proposals on the grounds that the proponents requested disclosures of financial risks related to sustainability challenges. SIF also praised the SEC’s subsequent rule change in December to require companies to disclose board diversity policies.
Why is further SEC action needed?
Investors’ efforts to incorporate ESG information into investment decisions have been hindered by a lack of comprehensive, comparable data. Because sustainability reporting among corporate issuers is largely still voluntary, it is far from universal, and often inconsistent and incomplete.
That is why we are asking the SEC to require issuers to report annually on a comprehensive, uniform set of sustainability indicators comprised of both universally applicable and industry-specific components and suggest that the SEC define this as the highest level of the current version of the Global Reporting Initiative (GRI) reporting guidelines. GRI was established to develop standardized indicators for reporting on ESG and continues to evolve these over time through a public and transparent standards-setting process.
The present global economic crisis has made it readily apparent that our existing system for corporate reporting has failed shareholders. We believe that robust sustainability reporting could have mitigated some of the impacts of the financial crisis. These types of disclosures would have promoted longer-term thinking by investors and corporations, and earlier detection of predatory lending and other destructive business practices. There is a tremendous opportunity to learn from these gaps and to construct a system of safeguards to protect investors. We are confident that mandatory sustainability reporting will contribute significantly to rebuilding public trust in corporations as well as the agencies regulating them in the wake of the present crisis.
We look forward to companies utilizing today’s guidance and to working with the SEC as it takes additional important steps to requiring wider sustainability reporting.”
EDITOR’S NOTE: To learn more about the SIF position on mandatory sustainability disclosure requirements, go to http://www.socialinvest.org/documents/ESG_Letter_to_SEC.pdf. To discuss today’s statement from Lisa Woll contact