October 5, 2019
Re: File Number S7-11-19 Modernization of Disclosure Items
The SEC staff's efforts to modernize the disclosure framework to recognize intangible assets and, in particular, human capital, is a positive sea change.
The SEC has always operated on the premise that investors are motivated primarily by a competitive return on their investments. This premise is no longer true for an increasingly large number of investors who care more about environmental, social and corporate governance (ESG) issues than an above-market yield on their investments.
Therefore, the disclosure rules should recognize that the investing public cares about ESG issues and that this concern will be as important a driver in the future global economy as return of investment.
If a company tries to attract investors, customers or vendors by a commitment to environmental, social or governance goals then it should describe this commitment in Item 101(c). It should describe how it quantifies its success in meeting its ESG goals.
Also, a company should be required to list risk factors in Item 105 as they pertain to ESG: for example, the risks of failing to achieve its ESG goals. If the company does not have ESG goals, then the risks of taking this position should be described.
Respectfully submitted,
Daniel H. Kolber
CEO, Intellivest Securities, Inc.
Member Ga., N.Y., Fla. and Va. Bars