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Microsoft and Alphabet, two of the most popular companies with investors focused on environmental, social and governance issues, are trying to keep up ESG appearances taken from regulatory proceedings for fear of legal risk.
The ESG technology positions presented to the U.S. Securities and Exchange Commission in recent days have clashed with other major asset managers who want to include Pimco, Invesco and ESG information in 10K annual regulatory filings. The SEC’s disclosure is mandatory and is looking at where they should be done.
Josh Zinner, director general of the Religious Center for Religious Responsibility, which brings together religious organizations and other ESG-minded investors, said the revelation will “create a more equal level and highlight the leadership of these companies.”
Microsoft and Alphabet said it “should position itself as a sustainability leader and certainly advocate for mandatory disclosure on ESG issues, including in regulatory files that would be responsible for information content.”
The struggle between asset managers and companies is expected to escalate in the coming months around ESG awareness. When global warming and human rights pose new risks to businesses, the SEC has launched unprecedented disclosure rules for the growing ESG sector.
By 2021, nearly a third of global capital inflows have been channeled to ESG funds, Bank of America said in a June 1 report. Assets managed in ESG funds hit a record $ 1.4 billion in April, more than double the level a year ago, and the rate of non-ESG assets rose nearly 3 times, the bank said.
Microsoft and Alphabet have benefited. Microsoft is the company with the most ESG funding in the U.S., Bank of America said. Alphabet is one of the top 10 ESG companies and ranks in nearly half of all U.S. ESG funds, BoA said.
Alphabet merged with other technology companies A letter from the SEC last week he recommended reporting on the ESG to “provide the SEC with information on new climates.”
“Given that climate change is based on estimates and assumptions that lead to inherent uncertainty, it is important that companies do not place unjust responsibility, even on private parties,” the companies said.
If companies are concerned about suing, the SEC may be harming the overall goal of providing more ESG data to the market, said Patrick Flynn, vice president of sustainability at Salesforce, one of the signatories to the letter. “It’s a new process for companies to move forward, and they’re going to have to put in place new procedures. Accepting some sort of safe harbor from liability. . .[allows]so that companies can push voluntarily and not just do the minimum. “
In a statement, Microsoft said his SEC letter This did not mean that climate outbreaks were excluded from SEC files. The climate data collection and verification cycle may not be consistent with year-end financial conditions.
Although it will continue to provide ESG knowledge outside of SEC files, Microsoft said “we believe that climate outbreaks in SEC files should be limited to information that is material for investment or voting decisions regarding the company.”
Alphabet has not commented.
“While it’s very good to see ESG leaders advocating for the SEC to adopt climate disclosure standards, we disagree with the assertion that such disclosures should be outside the SEC’s standard documentation such as 10-K, 10-Q or proxy statement.” Molly Betournay, shareholder defense director at Clean Yield Asset Management, which manages $ 450 million in assets. “Standard climate reports should include what the SEC regularly submits.”
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