Nov 01, 2019 - 12:15pm

US Chamber Backs More Consistent Environmental, Social Reporting from Corporations


Senior Writer and Editor, Strategic Communications

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Panel at Project GO Launch
The U.S. Chamber of Commerce launches Project GO in Washington, D.C. on Oct. 22. Photo by Joshua Roberts / © U.S. Chamber of Commerce

This is the second of three articles looking at Project GO, a new initiative from the U.S. Chamber. You can find the first article here.

As part of the recently-announced Project for Growth and Opportunity (Project GO), the U.S. Chamber of Commerce is urging corporations to transparently and consistently share relevant details about their environmental and social efforts through Environmental, Social, and Governance (ESG) disclosures.

“Companies understand the growing appetite for information from investors, employees, consumers, and the public alike. And that’s a good thing,” said U.S. Chamber of Commerce President Suzanne Clark. “In the face of growing demands, we encourage even more companies to voluntarily disclose relevant activities around ESG issues, and to do it in a way that provides the most useful information to help investors make decisions.”

The number of companies that have chosen to publish annual ESG reports has grown significantly in recent years, with 86% of companies in the S&P 500 voluntarily publishing such reports. ESG disclosures measure a company’s non-financial performance indicators, which include sustainability practices, social criteria, and corporate governance issues. Examples can include quantifying the company’s greenhouse gas (GHG) emissions or sharing details about the board’s diversity and structure.

Speaking at an event launching Project GO, Clark said ESG disclosures should continue to be voluntary and not be part of an overarching government mandate.

“The best practice of voluntary disclosures — done in a concise and commonsense way — coupled with current SEC regulations and Supreme Court rulings on disclosing ‘material’ information is the right approach to ESG reporting; not arbitrary mandates and expansive regulations,” she said. “Disclosures should be relevant to the operation of a company rather than dictated by activists or adversaries.”

Terry Campbell, vice president of global government relations at Nasdaq said many public companies are looking to improve ESG reporting and to make it more consistent.

“The Chamber’s work to get something on paper here is really critical,” Campbell said. “A lot of investors want to hear these issues…Some of the frustrations that we hear from our listed companies is [about] the lack of standards in this area. [But] We don’t want a government standard.” 

Thomas Quaadman, executive vice president of the U.S. Chamber’s Center for Capital Markets Competitiveness, said corporate ESG reporting should:

  • Be tied to long-term value creation.
  • Consider the audience.
  • Be written in plain English and clearly describe the metrics used.
  • Be overseen by someone who owns sustainability reporting at the company.
  • Fit the needs of that particular company and industry.

Quaadman added that the Edison Electric Institute — working together with the American Gas Association — had developed a model to help electric and gas companies report on their sustainability activities in a uniform, data-driven way. As a result, their member companies have reported that a significant number of ESG-related proxy proposals were withdrawn.

“The Edison Electric Institute should be commended for developing standards for its members and investor base,” Quaadman said. “We believe that this is a model that other industries should copy.”

The U.S. Chamber has released ESG-reporting best practices for corporations to use as a guide when compiling their own ESG disclosures.  

Moving forward, and working closely with business and policy leaders, the U.S. Chamber will report on progress on this issue and other proposed Project GO solutions that combine real-world business solutions supported by practical public policy.

 

 

About the Author

About the Author

Senior Writer and Editor, Strategic Communications

Thaddeus is a senior writer and editor with the U.S. Chamber of Commerce's strategic communications team.