SEC to bring ESG into Regulation?

Last week Morgan Stanley Capital International (MSCI) announced it is acquiring RiskMetrics (who themselves acquired KLD, Innovest and Institutional Shareholder Services in the past three years). Is this a sign that ESG  is going mainstream? Another clue might be the agenda of last week’s SEC Investor Advisory Committee (IAC) meeting, which included such items as an “ESG Disclosure Work Plan” and “Proxy Voting Transparency”. Author Bill Baue asks: what does it mean?

The existence of the IAC is a good indication that ESG regulation may be under way. It attests to the ‘G’ aspect of ESG. The IAC acts as a sounding board, giving guidance to the SEC on their regulatory agenda. Though the SEC doesn’t have to act on anything the IAC recommends, its existence is still a vehicle of expression for the public voice – meaning the SEC would need a good reason to ignore the recommendations of the IAC, according to Baue.

More S&P 100 companies producing sustainability reports

In an article from the Social Investment Forum and SIRAN last month, it’s reported that the number of S&P 100 companies producing a sustainability report has grown by a third in the past year. Further, 93 of the 100 companies provide some type of sustainability information on their web sites. This year SIRAN hired KLD to write the report: S&P 100 Sustainability Reporting Comparison.

The report also states that in addition to sustainability reporting, there has been an increase in companies’ adopting the Global Reporting Initiative framework. In 2008, 66 companies produced a formal sustainability report, up 35% from 2007. SIRAN has produced this report annually since 2005. To see the current report, click here.