Top U.S. fund leader wants voluntary climate disclosure rules

Investment (THE)

06/05/2021 18:00

By Ross Kerber
    May 6 (Reuters) - A top fund industry leader on Thursday
urged U.S. regulators to adopt only voluntary climate-related
disclosure standards for public companies rather than the
stricter rules sought by some activists and investment firms.
    Eric Pan, CEO of the Investment Company Institute, which
represents asset managers and other big U.S. investors, said the
softer approach would give companies time to adjust to new
technologies and scientific evidence, according to prepared
remarks of a speech he was set to give at his trade group's
virtual conference on Thursday.
    Pan said companies should "not be hampered by prescriptive,
'hard-wired' disclosure requirements - which would be nearly
impossible to set today to successfully govern disclosure
between now and 2050," the date set by U.S. President Joe Biden
for the nation to reach net-zero emissions.
    Leaders of the U.S. Securities and Exchange Commission are
taking public input on how they might direct companies to report
more about the environmental and social impact of their
operations.  urn:newsml:reuters.com:*:nL1N2L72S8 
    Investors have poured money into funds using sustainability
criteria, allowing portfolio managers to push companies to take
steps like disclosing more about their emissions. Larry Fink,
CEO of top fund firm BlackRock Inc  BLK.N , last month called
for mandatory disclosures for both public and private companies
worldwide.  urn:newsml:reuters.com:*:nL1N2M012K
    Currently many large U.S. companies produce "sustainability
reports" but using a dizzying array of non-common standards,
making them hard to prepare and to compare. 
    On April 21 the European Union said it plans to raise the
number of companies required to report ESG data amid criticism
the current rules are ineffective.  urn:newsml:reuters.com:*:nL8N2MC4ZM
    Pan noted his trade group's board has previously backed two
widely used voluntary disclosure standards, those of the Task
Force on Climate-Related Financial Disclosures and from the
Sustainability Accounting Standards Board. 
    The SEC should encourage the use of both standards, Pan
said, and work toward getting companies to provide detailed
climate risk information rather than "bland, boilerplate
disclosure that is geared mainly at minimizing legal liability."
     

 (Reporting by Ross Kerber in Boston
Editing by Matthew Lewis)
 ((ross.kerber@thomsonreuters.com; (617) 856 4341; Reuters
Messaging: Ross.Kerber.Reuters.com@Reuters.net))