Subject: File No. S7-06-16
From: mark ferguson

July 7, 2016

As a Portfolio Manager of a public equity portfolio with a long term investment horizon it is of paramount importance that companies reporting and disclosure reflects the progress and health of its most important assets. In 2016 it is obvious to any reasonable investor that only a fraction of the worlds most valuable companies are captured by tangible assets recorded on their Balance sheet. The majority of the value is implicitly contained in what are elusively termed 'intangible assets'. Brands, customer relationships, human capital and organisational culture along with License to operate risks and liabilities associated with societal and environmental externalities may be considered woolly and imprecise issues until you consider that these are precisely the things that business managers spend their time thinking about and managing to. Financial accounting needs to find a better way to measure and track the things that are of most important to the health and wellbeing of the majority of companies in the 21st Century. Sustainability is a compelling framework for closing some of the value gaps in accounting standards.