Does Environmental and Social Disclosure Affect Innovation at Companies?

Companies are typically not compelled to disclose environmental and social (E&S) information because this information does not meet the materiality standard used in many jurisdictions. However, some shareholders have an explicit mandate to screen potential investments based on E&S criteria. The growing popularity of socially responsible investing, which accounts for more than one in four dollars under professional management in the United States (US SIF 2018), has raised questions about the optimal standard of materiality for E&S information. Recent statements by the SEC’s Investor Advisory Committee indicate that the environmental and social information provided by firms lacks the materiality, comparability, … Read more