VOICES FOR HUMAN RIGHTS

U.S. Should Follow EU’s Lead on ESG Policy

3/31/2021ESG Investing

At a time when the Black Lives Matter movement and Covid-19 pandemic are prompting organizations to re-evaluate their responsibilities to society, the U.S. still hasn’t required companies to report ESG data, even though it could help ensure better racial and gender equity, among other benefits.

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The European Union is setting a standard for environmental, social and governance (ESG) disclosures that the U.S. needs to work quickly to catch up to (‘EU Rules Challenge U.S. Funds,’ Banking & Finance, March 23).

At a time when the Black Lives Matter movement and Covid-19 pandemic are prompting organizations to re-evaluate their responsibilities to society, the U.S. still hasn’t required companies to report ESG data, even though it could help ensure better racial and gender equity, among other benefits. Americans regularly consider whether food is fairly traded, organic and locally sourced as they hunt for low prices. In buying clothing, sustainability and ethical labor practices are often major factors. It can and should be no different in the investment of retirement funds. What’s more, the mandated disclosure of them should be welcomed on both sides of the Atlantic.

As the leader of the Robert F. Kennedy Compass Investor Program, a network of over 300 institutional investors, asset managers and investment consultants controlling close to $7 trillion in assets under management, I have routinely heard how important ESG factors have become to major pensions and endowments. More important, I continue to hear how well ESG funds perform against traditional funds in terms of the return on investments.

Transparency and accountability are cornerstones of any strong democratic society. As the U.S. seeks to reclaim its position as a moral authority during the Biden administration, it’s imperative that the country not lag behind in important financial decisions.

“As the U.S. seeks to reclaim its position as a moral authority during the Biden administration, it’s imperative that the country not lag behind in important financial decisions.”

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