Statement at Inaugural Meeting of the Asset Management Advisory Committee

Thank, you. I’ll be brief so you can all get started with your important work. I second the remarks of my colleagues regarding how important the asset management industry is to American investors. Clients of all types—from retirees and retail investors to large institutions and pension plans—rely heavily on the people in this room and your colleagues to manage their finances, help them save and invest for the future, and exercise independent judgment in voting their shares. I want to thank Director Dalia Blass for helping to establish this Committee, and everyone in this room for your willingness to contribute your time and expertise.

There are many issues worthy of this Committee’s attention, and I look forward to your assessment of how best to spend your time and resources. I want to highlight one area of increasing significance to the investors you all serve: the ability to accurately assess, compare, and invest in companies with sound policies on sustainability, ethical business standards, and good governance. Evidence continues to mount regarding how critical this information is for investors in their decision-making process.[1] Indeed, a recent academic survey indicates that over half of the institutional investors surveyed globally considered climate risk disclosure, in particular, to be as important as traditional financial disclosure.[2] 

 Yet the Commission last addressed climate-related disclosure a decade ago.[3] I do not want to see us fall behind the rest of the world in ensuring that investors receive the sort of material information that the market is demanding.

As you start to think about this Committee’s agenda and how you can help both the Commission and the public, I hope you will consider some of the following issues. How can the Commission ensure that asset managers and their clients can meaningfully pursue their investment goals and have access to critical information related to climate risk and, more broadly, to ESG issues? What set of standards will best serve investors and asset managers in evaluating a company’s exposure to climate risk and assessing and pricing that risk? What should it mean when a fund calls itself an ESG fund? And how can the Commission and investors ensure that asset managers are not only investing in line with the long-term goals of their clients, but also voting in line with those goals?

Again, this is just one of a number of important areas where we will benefit from your expertise. I thank each of you for your time and dedication in helping the Commission better serve investors and the public. I look forward to your analysis and recommendations.