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A congressional watchdog has been asked to review corporate reporting on topics from climate change to political spending.
Sen. Mark Warner (D-Va.), who requested the review July 19, says regulators haven’t issued comprehensive standards for reporting on what’s known as environmental, social, and governance (ESG) issues. That leaves it up to companies to decide how much, if any, information to provide to investors or the public.
“Investors are increasingly demanding information on ESG issues,” Warner told the U.S. Government Accountability Office. He pointed to a 2016 study that showed investments factoring in ESG criteria have grown to $8.72 trillion, more than one out of every five dollars under professional management in the U.S.
Warner, in his request to the GAO, said corporate disclosures on ESG tend to be inconsistent and difficult to compare because of a lack of rules specific to this area.
The Securities and Exchange Commission asked in 2016 for feedback on such reporting as part of a broader review of disclosure rules for public companies. It got more than 25,000 responses, most of which were related to ESG-type disclosures.
“The SEC has not taken further action in this area,” Warner said in his letter to the GAO. He’s asking for a study that considers the current state of ESG reporting and whether Congress and the SEC should make such disclosures a requirement.
The office doesn’t automatically approve congressional requests to write a report. A GAO spokesman said it will decide whether to accept Warner’s request in the next couple of weeks.
An SEC spokeswoman declined to comment.
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