Six ways to satisfaction, SEC told

The Securities and Exchange Commission should reinstate the investor advisory committee it abandoned in 2010 as part of a wider commitment to address near-term financial market reform, a group of institutional investors from across the globe have stated.

The investors, who represent combined assets of $1.6 trillion, wrote to SEC chairman Mary Schaprio calling for the SEC to address “unfinished business that is critical to protecting and strengthening shareowner rights and investor confidence in the financial markets.

Led by CalPERS’ chief executive, Anne Stausboll, the investors called for six initiatives including reviving the SEC investor advisory committee.

That committee, which was formed in June 2009 and abandoned in November 2010, was tasked with advising the SEC on investors’ concerns in the securities markets; provide the Commission with investors’ perspectives on current non-enforcement regulatory issues; and serve as a source of information and recommendation to the Commission regarding its regulatory programs from the point of view of investors.

The group of investors urged the Commission to address these six initiatives as a priority.

1. revive the investor advisory committee and appoint the investor advocate
2. renew rulemaking for universal proxy access
3. adopt final rules on executive compensation under the Dodd-Frank law
4. advance International Financial Reporting Standards
5. develop a transparent and independent rating system
6. advance sustainability disclosure and board diversity, including clarifying and enforcing climate change disclosure guidance for companies and ensuring integrated reporting on diversity and sustainability.

Mindy S Lubber, director of the Investor Network on Climate Risk, a network of 100 institutional investors across North America managing more than $10 trillion in assets, and president of Ceres, an advocate for sustainability leadership, supports the call for climate change disclosure.

“Ensuring disclosure compliance would especially benefit investors who are awakening to the urgent need to hedge against growing climate risks in many parts of the world. Investors need full disclosure from companies about how they are managing climate change risks – as well as responding to its opportunities for innovating clean technologies and products,” she says

The letter to the SEC by the group of investors can be accessed here.

Investors signing the letter include:

AustralianSuper Pty Ltd

All Pensions Group (APG)

BT Pension Scheme Management Ltd

California Public Employees’ Retirement System

California State Teachers’ Retirement System

Connecticut Retirement Plans and Trust Funds

Co-operative Asset Management

Florida State Board of Administration

F&C Management Ltd.

Office of New York City Comptroller

Ohio Public Employees’ Retirement System

PGGM Vermogensbeheer B.V. (PGGM)

RPMI Railpen

Universities Superannuation Scheme (USS)

“Ceres strongly supports the investors’ call for the SEC to implement urgent financial market reforms that will bolster investor confidence in the wake of the financial crisis that Americans are still recovering from,” stated Lubber. “We especially support the investors’ call for greater clarity and compliance with its interpretive guidance on climate risk disclosure by companies.
Climate change presents huge risks on a scale comparable or worse than the banking crisis. Extreme weather events are increasing, triggering unprecedented losses in 2011, including $10 billion in drought and wildfire losses in Texas and the Southwest. US insurers paid out an extraordinary $44 billion for hurricane, flood and other weather-related losses – more than double what they paid in 2010.
Further clarity from the SEC would benefit not only insurers grappling with reporting on climate risks and how to manage them – but many other sectors of the economy from agriculture to electric power to apparel.

Ceres is an advocate for sustainability leadership and leads a national coalition of investors, environmental groups and other public interest organisations working with companies to address sustainability challenges such as global climate change and water scarcity. Ceres also directs the Investor Network on Climate Risk (INCR), a network of 100 institutional investors with collective assets of over $10 trillion. For more information, visit http://www.ceres.org and http://www.incr.com.