Investors Should Drive Sustainability, SEC's White Says

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By Rob Tricchinelli

June 28 — Investors should be doing more to drive companies’ sustainability efforts, because SEC-mandated disclosure by itself can’t provide what they seek, agency Chairman Mary Jo White said late June 27.

SEC rules require that companies disclose sustainability measures, such as those addressing climate change or social responsibility, if they are material to financial results or operations.

Investors clamoring for more corporate sustainability initiatives, however, aren't likely to find full satisfaction from the agency.

“The issue has our attention,” White said in a keynote address to the International Corporate Governance Network's annual conference. “But disclosure alone will not achieve the ultimate results many investors and other constituents are seeking.”

White said thoughtful investor advocacy is the best route to bring about the desired “strategic, supply chain and business model changes.”

“Encourage and prod companies to acknowledge sustainability objectives that are in line with what makes the most sense for their businesses, demand that they describe what they are doing to achieve those objectives and how they are doing against your expectations,” she added.

Board Diversity

The agency should also change its disclosure rules so that investors are able to make better choices in selecting diverse boards, White said. “The low level of board diversity in the United States is unacceptable.”

The agency is working on a rule proposal that would require companies to put more information about board nominees' diversity in their proxy statements.

The current rule leaves it up to companies to define and disclose how they define diversity, if they even have a policy to consider it when weighing board nominations.

“My view is that the SEC has a responsibility to ensure that our disclosure rules are serving their intended purpose of meaningfully informing investors,” she said. “This rule does not and it should be changed. Our lens of board diversity disclosure needs to be re-focused in order to better serve and inform investors.”

A nominee to one of the SEC's vacancies, law professor Lisa Fairfax, would be well-positioned to aid agency efforts on board diversity, but her nomination is stuck in limbo in the Senate (30 CARE, 2/16/16).

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To contact the editor responsible for this story: Phyllis Diamond at

For More Information

The text of White's speech is available at

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