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3 thoughts on “Should Corporate ESG Disclosures Be Mandatory?

  1. This article is a little late as the comment period is already closed. One other factor lurking behind many of these discussions – the Big Four accounting firms and others have a powerful economic incentive in expanding the range of public information that would require validation. That’s not to say expanded ESG disclosure is unnecessary or undesirable, but there are huge differences between a SEC filing and a sustainability report in terms of the expense and level of effort.

  2. Agree; the heads-up on SEC’s Concept Release for Regulation S-K is late. All the comments received (including mine) can be found at https://www.sec.gov/comments/s7-06-16/s70616.htm.
    The article does a disservice to corporate reporters on two matters.
    The reference to the number of public issuers making conflict minerals filings links to a 2014 reference. True, the number of filers was below initial projections. There are several reasons, including SEC clarification about mixtures and an incorrect initial assumption. For the 2014 (second) reporting year, a few companies submitted that had not done so the prior year – but not many.
    Second, the SEC guidance (February 2010) on addressing climate change in financial filings created no new law or requirements. The Guidance simply provided a roadmap for how organizations should evaluate materiality for purposes of making disclosures about anything – including climate change.
    The SEC’s Concept Release for Regulation S-K included a section on Sustainability. It was one of several issues under consideration.

  3. I agree with Bruce and Doug, but it is not a surprise that this is only now being brought forward in the sustainability realm. I have found that this element of the SEC Release was identified by very few sustainability practitioners and even fewer industry associations. Further, I agree with Bruce that other agendas are pushing this, including organizations that are attempting to generate revenue from creating various standards related to sustainability accounting, reporting and assurance. Even though my firm stands to gain from required ESG disclosures, our comments to the SEC argue against mandated sustainability disclosures unless there is an associated change in how the Commission defines materiality or its core mission. http://www.elmsustainability.com/elm-comments-on-secs-sustainability-disclosure-concept-release/

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