Mandatory Sustainability Reporting
In April, the Securities and Exchange Commission (SEC) issued a historic Concept Release, seeking comments on a wide range of rules that require publicly traded companies to disclose information to their investors. We were very pleased to see the inclusion of a series of questions about sustainability information among the Release’s more than 300 pages.
The last time the SEC took a hard look at sustainability reporting was 1975. The world has changed dramatically since then. At that time, very few investors used social and environmental factors to make investment decisions, or to vote their proxies. Today, however, investors managing $60 trillion have endorsed the United Nations-supported Principles for Responsible Investment, which includes commitments to use environmental, social and governance factors in the investment process and to engage with companies on these issues. The CDP gathers information from corporations about climate change, deforestation and water usage on behalf of investors managing $100 trillion.
During the second quarter, Domini worked closely with other responsible investors and NGOs to seek consensus, and were pleased to share our views as a panelist on several webinars to help get the word out about this important opportunity. We also provided comments to letters submitted on behalf of large investor coalitions. In July, we submitted our own letter, expressing our strong support for mandatory sustainability reporting, including specific indicators on climate change, human rights, employee relations and more. We also signed a letter submitted by Ceres on behalf of 45 institutions representing $1.15 trillion, addressing climate change disclosures. As a member of the UN PRI’s Investor Taskforce on Tax, we also ensured that the SEC received our report on international corporate tax practices.
Although we do not expect immediate action by the SEC, we hope to ensure that it no longer ignores investors’ need for comprehensive, reliable sustainability information.