Interesting debate yesterday before the US Senate Banking Committee on the topic of expanding disclosures of US companies to include environmental, social and governance data besides just financial disclosures
As Broc points out in his most recent posting… “SEC Chair White not only indicates that a rule proposal regarding board diversity disclosures is coming soon, it highlights that the US SEC Corp Fin Staff is actively reviewing climate change & sustainability disclosures – and it could conduct rulemaking in this area soon too. Here’s an excerpt: “Currently, disclosure of sustainability information under SEC rules is being addressed by a combination of our materiality-based approach to disclosure, guidance on certain issues, and shareholder engagement on a range of sustainability topics, whether through direct dialogue with management or our Rule 14a-8 shareholder proposal process. Although we are seeing increased disclosure and engagement on sustainability matters, we are taking a more focused look at such disclosures, particularly related to climate change, in our annual filings reviews
The SEC itself acknowledged widespread investor dissatisfaction with the quality of mandated sustainability disclosures in an April 2016 Concept Release on Disclosure Effectiveness. 10 That said, there is no indication that the SEC intends to pursue regulatory changes relating to the so-called “mandatory” sustainability disclosures that must be made in SEC-filed documents, thus leaving the field open for “private ordering” to continue – in the form of voluntary corporate sustainability disclosures posted on company websites or otherwise appearing outside the four corners of SEC filings.”
But nevertheless, the disclosure of controls to manage reputation risks through social media outlets is something few companies disclose in documents to the public or regulators
Importance of Diversity and Inclusion Having an active diversity and inclusion strategy and disclosing these metrics included in the financial report also builds the business case to attract an increasing number of investors looking for this additional data disclosure
SASB and the IMA agreed to identify ways to align the thought leadership of both organizations to strengthen corporate reporting and disclosure and share each other’s work
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This also includes human capital data disclosure by companies including gender pay and pay ratio data including composition of boards of directors.