Investors, the public, and regulators must be informed and empowered to address the great challenges facing our companies, our country, and the world. Information and transparency are essential.
The federal securities laws administered by the Securities and Exchange Commission (SEC) have brought a level of transparency to U.S. public markets for over eighty years. Yet, our world has changed in that time. Whether the issues are climate change, human rights, tax, political spending, or workforce matters; investors and the public are increasingly demanding transparency on a wider range of environmental, social, and governance (ESG) issues than ever before. Fortunately, modern technologies permit stakeholders to process far more information than ever before. Yet despite this demand for more information, and the increased capabilities of investors to utilize it, the SEC has nevertheless declined to meaningfully update its ESG disclosure requirements for decades.
Two years after it formally kicked off its “Disclosure Effectiveness” review, on April 13, 2016, the SEC issued a Concept Release on whether and how it should change its core disclosure rules. In that Concept Release, the SEC asked for public feedback on the frequency and formats of companies’ disclosures, accounting practices and standards, and the substantive areas that should be disclosed, including a section on sustainability. This report briefly walks through the purpose of the Concept Release and the public response to it.
The above excerpt was originally published in Public Citizen.
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