June 15, 2021
Good day to the Commission and thank you for soliciting public input as you evaluate climate change disclosure regulations. I am writing to the Commission as an investor, one who invests for retirement, childrens college savings, and various other savings purposes. It is in my capacity as a retail investor that I submit this letter of input for the Commissions consideration.
I support the Commissions efforts to ensure investors have the disclosures necessary to make informed investing decisions and understand some investors are demanding greater and more consistent disclosures around climate change and potentially ESG matters in general. As a retail investor, I am pleased with the general direction most companies have taken to provide separate annual reports on these matters. As the Commission continues to evaluate and develop disclosure regulations, I would like to call to your attention the following matter:
Disclosure regulations may provide for a limited few to have outsized influence or control A large amount of investments, including retirement accounts, invest in funds rather than direct holdings of company stocks. These funds are managed by asset managers (e.g. Vanguard, Fidelity) who serve an important role as a large number of retirement investments are made through funds. This fund structure, however, seems to provide the asset managers with a degree of influence over the companies that the underlying investor does not have.
As many ESG fund investors have experienced, the asset managers often have no means of receiving investor input. I have experienced the same as a retail investor seeking to provide feedback to three of my asset managers. Considering that Investors are demanding these climate change disclosures and potential ESG disclosures, I find it troubling that there is not a mechanism in place by asset managers to receive investor feedback if they are acting on behalf of their investors.
Of concern to me, is the ability these disclosure regulations may provide for the asset managers to influence companies and issuers toward a strategy that may not reflect the investors interest, or worse, enable the asset managers to pursue their own enrichment over their investors.
I urge the Commission, as it evaluates disclosure regulations, to ensure appropriate safeguards are in place to prevent a limited handful of asset managers (and proxy advisors by extension) from using investors funds to influence companies strategies on climate or ESG matters without investor input, or worse, effecting strategic changes that provide the opportunity to enhance the wealth of the asset managers at the expense of the actual investors.
I appreciate all of the Commissions efforts to protect investors and maintain fair, orderly, and efficient markets.