May 6 (Reuters) - A top fund industry leader on Thursday
urged U.S. regulators to adopt only voluntary climate-related
disclosure standards for public companies rather than the
stricter rules sought by some activists and investment firms.
Eric Pan, CEO of the Investment Company Institute, which
represents asset managers and other big U.S. investors, said the
softer approach would give companies time to adjust to new
technologies and scientific evidence, during his speech at the
trade group's virtual conference on Thursday.
Pan said companies should "not be hampered by prescriptive,
'hard-wired' disclosure requirements - which would be nearly
impossible to set today to successfully govern disclosure
between now and 2050," the date set by U.S. President Joe Biden
for the nation to reach net-zero emissions.
Leaders of the U.S. Securities and Exchange Commission are
taking public input on how they might direct companies to report
more about the environmental and social impact of their
Investors have poured money into funds using sustainability
criteria, allowing portfolio managers to push companies to take
steps like disclosing more about their emissions. Larry Fink,
CEO of top fund firm BlackRock Inc, last month called
for mandatory disclosures for both public and private companies
The head of JPMorgan Chase & Co, Jamie Dimon, who
also spoke at the conference, said required disclosures could be
onerous, expensive and would not help fight climate change.
"Reporting won't solve the problem," Dimon said, adding he
is concerned about multiple agencies proposing different
disclosure requirements. "If we just impose rule after rule,
were going to not accomplish anything (and it will come) at a
Currently many large U.S. companies produce "sustainability
reports" but using a dizzying array of non-common standards,
making them hard to prepare and to compare.
On April 21 the European Union said it plans to raise the
number of companies required to report ESG data amid criticism
the current rules are ineffective.
Pan noted his trade group's board has previously backed two
widely used voluntary disclosure standards, those of the Task
Force on Climate-Related Financial Disclosures and from the
Sustainability Accounting Standards Board.
The SEC should encourage the use of both standards, Pan
said, and work toward getting companies to provide detailed
climate risk information rather than "bland, boilerplate
disclosure that is geared mainly at minimizing legal liability."
(Reporting by Ross Kerber in Boston
Additional reporting by Elizabeth Dilts Marshall in New York
Editing by Matthew Lewis)