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Sustainability Risk is Investment Risk

August 2020

Citation: ELR 10644

Author: Sally R.K. Fisk and Nikki Adame-Winningham

In her Making Sustainability Disclosures Sustainable article, Prof. Jill E. Fisch proposes creating a Sustainability Discussion and Analysis (SD&A) section to expressly obligate reporting companies to disclose their three most significant sustainability issues in annual reports to the U.S. Securities and Exchange Commission (SEC). Professor Fisch posits that the proposed SD&A, as a workable first step in mandating sustainability disclosures, would provide comparability and reliability to reports that are currently difficult to compare and which may vary in reliability. Professor Fisch correctly recognizes the challenges of both reporting on sustainability issues from the issuer perspective, as well as using such disclosures from the investor perspective. But what if the that obligation to adequately disclose sustainability issues already exists within extant SEC reporting requirements? This Comment acknowledges the need for accuracy, reliability, and comparability in sustainability disclosures and agrees that piecemeal regulation of individual sustainability issues is inefficient and undesirable, but is unconvinced that new mandatory disclosure requirements—even principle-based requirements—are necessary to achieve those goals.

Sally R.K. Fisk is Assistant General Counsel, EHS & Global Supply Compliance Lead, Pfizer Inc. Nikki Adame-Winningham is Corporate Counsel, Environmental Law Group, Pfizer Inc.

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