More than 50 major investment firms and professionals, as well as the Social Investment Forum, have asked the Securities and Exchange Commission to require public companies to annually report on environmental, social and governance (ESG) matters.
The organizations are asking the SEC to require companies to report annually on sustainability indicators in accordance with the most up-to-date reporting framework of the Global Reporting Initiative and on other material ESG matters as they come to light.
In a letter to SEC Chairman Mary Schapiro that accompanied the proposal, the investors said: "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."
To see the full text of the letter, click here.
Among the signers is Ceres, a leading coalition of investors and environmental groups that has been working with many of the nation's largest investors to persuade the SEC to issue guidance on ESG disclosure companies should be providing.
The Interfaith Center on Corporate Responsibility (ICCR), a coalition of nearly 300 faith-based institutional investors representing over $100 billion in invested capital, also endorsed the proposal. In addition to the Social Investment Forum, the full list of signers on the SIF letter consists of (in alphabetical order): As You Sow Foundation; Boston Common Asset Management; Calvert Asset Management Company Inc.; Center for Social Philanthropy, Tellus Institute; Ceres; Christian Brothers Investment Services Inc.; Congregation of the Sisters of St. Agnes; Corporate Governance (newsletter); Domini Social Investments; Dominican Sisters of Hope; Edward W. Hazen Foundation; EIRIS; Enterprising Solutions; Ethos Foundation; First Affirmative Financial Network LLC; Friends Fiduciary Corporation; Funding Exchange Inc.; Governance & Accountability Institute; Green Century Capital Management Inc.; Investor Environmental Health Network; Interfaith Center on Corporate Responsibility; IW Financial; KLD Research & Analytics Inc.; Krull & Company; Manhattan Country School; Marc J. Lane Wealth Group; Marianist Province of the United States; Merck Family Fund; Mercy Investment Program; Miller/Howard Investments; Northwest & Ethical Investments L.P.; Northwest Coalition for Responsible Investment; Outcrop; Oxfam America; Parnassus Investments; Pax World Management Corp.; Portfolio 21 Investments; Progressive Asset Management, Inc.; Region VI Coalition for Responsible Investment; RiskMetrics Group; Sisters of Charity of Cincinnati; Sisters of St. Francis of Philadelphia; Sisters of Mercy Regional Community of Detroit Charitable Trust; Sisters of St. Joseph of Springfield, MA; The Corporate Library; The Sustainability Group at Loring, Wolcott & Coolidge; Tides Foundation; Trillium Asset Management; Unitarian Universalist Service Committee (UUSC); Universal Health Care Foundation of Connecticut; Ursuline Sisters of Tildonk, U.S. Province; Veris Wealth Partners; and Walden Asset Management.