Enter the SEC

April 21, 2021

(Almost) everyone wants more disclosure. 

Hello from Impact Delta. It's Earth Day tomorrow.

Periodically, we share updates and content that we produce, as well as select other news that caught our eye. In this issue:

Disclosure. More please. In March, the European Union enacted the first phase of its Sustainable Finance Disclosure Requirement (SFDR). These regulations are designed to provide consistency and transparency around sustainability claims (i.e., fight greenwashing), and also consideration of adverse impacts of investments. Also in March, the International Financial Reporting Standards Foundation (IFRS) announced a working group to accelerate convergence in global sustainability reporting.

The Maple 8 agree... Last November, Canada’s eight largest pension plans (CAD1.6 trillion AUM) jointly announced that they are seeking better corporate disclosure of sustainability data. Several of the CEOs of these pension plans have since been vocal in their support, including in this April 14 McKinsey interview with Charles Emond, the CEO of Caisse de dépôt et placement du Québec ($291 bn AUM).

...and so does the SEC. Acting SEC chair Allison Herren Lee gave a landmark speech on March 15, which pointed out that the most “fundamental role” of the commission is to ensure material information gets into the markets in a timely manner. And that, when it comes to ESG, “demand is not being met by voluntary frameworks.” The speech launched an overhaul, and enforcement of existing policies appears to be stepping up.

Why do some Green Bonds trade at a premium over other Green Bonds? A recent research paper provides a meta-study explores why some Green Bonds trade at premium (a “greenium”). One conclusion: adopting best practices and standards, along with transparent disclosure, is rewarded by investors.

The Facts. In each issue, we share a few facts. Since 1880, global mean sea level has risen 21-24 centimeters. For most of the 20th century, sea level rose 1.4mm per year. Since 1993 (the beginning of the satellite record), sea level has risen about 3.4mm per year, but at an accelerating rate. How much did sea level rise in 2019? 6.1mm.

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About Impact Delta

A secular shift towards a more responsible capitalism is underway. Impact Delta is a specialist consultancy founded to help investment firms capitalize on this shift. We believe good environmental and social thinking helps investment firms raise capital and earn better returns. More about us here.

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