May. 26, 2022
To Whom It May Concern: I assure you this will be brief. My name is Colte Koen – President of Cellulogyx. I am writing today not to speak solely to File Number S7-10-22, but to the perceived fallacy in combining Environmental and Social into the same overarching scoring system; however, before I start, please allow me to first admit some bias… Disclosure of Bias: We are a processor of sustainable plant-derived cellulose and fiber for the purpose of displacing: Wood-derived cellulose Paper, paper products, etc Bioplastics Building materials i.e. concrete Fossil fuel petrochemical products Petrochemical plastics Bioplastics are increasingly made from cellulose Synthetic fibers Building materials Composites All things fiberglass, carbon fiber, etc Textiles As a company, our primary focus is providing large corporations with alternative sustainable raw ingredients for the primary production of paper, plastic, composites, and building materials. In attempting to provide an alternative to GHG producing petrochemical plastics and deforestation activities, our preliminary assessment of the ESG reporting process finds that the combination of Environment and Social activities in a final ESG score allows for the masking of either Social or Environmental shortcomings to some degree. Though the SEC has done a great job of requiring an identification of and reporting on the particular SDG(s) the corporation is pursuing, the final ESG score that the investment community is basing investment decisions on becomes arguably convoluted. While some agreement exists that overlap between E and S exists, our argument is that these two activities are simply too independently important to combine. A company’s advancement of Social SDGs could enhance an overall ESG score and overshadow less impressive Environmental SDG progress (and vice versa). Our collective global effect on climate change is wholly independent of how we see employees and communities being treated and to date, we have not identified a weighted scoring process that truly treats E or S with the independent importance each deserves. The ask is this: Is it the case that it is in the SEC’s periphery to allow for two different but equal total scores for Environmental and Social? Selfishly, we would like to see our customers be able to enjoy being specifically acclaimed for their Environmental efforts; particularly in appealing to those investment communities who place a higher value on E vs S. Equally important is the allowance of those investment communities that value S over E to be able to easily identify those opportunities. We fully understand the prospective position of “too late to turn back now” but we would be remiss if we didn’t enter this concept into the discussion pool. We also acknowledge that Governance was not in this discussion but it is simply outside of the scope of our particular focus. Thank you sincerely for any time and/or consideration given here. Kindest Regards, Colte Colte Koen President