Investors Urge the SEC and Administration to Continue Robust Implementation of Dodd-Frank (Section 1502) Conflict Minerals Rule
BOSTON, MA – March 7, 2017 – A coalition of 127 investors representing over $4.8 trillion in assets under management have called on the U.S. Securities & Exchange Commission (SEC) and the current Administration to continue the comprehensive implementation of Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Securities and Exchange Commission's Conflict Minerals Rule.
Lead investors and investor groups, including Boston Common Asset Management, ICCR, Mercy Investment Services, Responsible Sourcing Network, Trillium Asset Management, and US SIF: The Forum for Sustainable and Responsible Investment in a statement expressed their continued support of the SEC’s Conflict Minerals Rule and highlighted that while no single law can solve all the underlying problems that are causing conflict in the Democratic Republic of Congo (DRC) region, since 2010, Section 1502 has demonstrated success in diminishing revenue flows to militia groups. The law has catalyzed positive change in the region's mining sector, encouraged an effective response by U.S. companies to address material risk in their supply chains, and contributed to responsible economic development in the DRC.
The statement reinforces that conflict minerals disclosure is material to investors and has informed and improved investors' ability to assess social (i.e., human rights) and reputational risks in a company's supply chain and a company's long-term mitigation of risks.
Given that companies worldwide are under increasing scrutiny and regulation on conflict minerals from the DRC including the EU's Conflict Minerals Law, the lead investors were joined by asset managers from around the world including APG Investment Management, Hermes EOS, Ledger & General, MN, NEI Investments, Robeco, and Triodos Investment Management and pension funds such as New York City Comptroller Scott M. Stringer, PGGM, and Sweden’s AP1, AP2, AP3 and AP4.
At the end of January, Acting SEC Chairman, Michael Piwowar, requested public feedback on the Conflict Minerals Rule (comment period ends March 17th). A leaked draft Executive Order was also released in February asking for a proposed two-year suspension of the rule. The investor statement calls on the SEC to ensure that in order for the rule to achieve maximum impact, it pursue robust enforcement of the requirements.
Lauren Compere, Managing Director, Boston Common Asset Management
“We believe many of the arguments in the draft Executive Order for the Rule’s proposed two year suspension were misinformed, especially around implementation costs and the rule’s effectiveness. Elm Sustainability recently reported that actual compliance costs of the Rule’s implementation have ‘dropped significantly, in large part due to innovations and efficient tools available to issuers and suppliers at no cost.’ Reasonable investment is needed to conduct due diligence, identify and address risk, and protect the company and investors from the potential reputational, financial and legal risks associated with being linked to egregious human rights abuses.”
Patricia Jurewicz, Director, Responsible Sourcing Network
"Mandatory disclosure legislation is imperative to maintain. It has been the driving force for the momentum and action by corporations to research their supply chains, be transparent about their actions, and be responsible to the communities that deserve to prosper from the electronics craze sweeping across the world. In addition, 1502 has improved the lives of local communities by encouraging the certification of over 200 conflict-free mines."
David Schilling, Senior Program Director, ICCR
“ICCR’s faith-based investors have a 25-year track record in advocating for corporate respect for human rights in global supply chains. Transparency has been a critical tool for improving human rights in the workplace and communities. Section 1502 has been instrumental in creating a level playing field for corporate reporting and for conflict-free mineral supply chains, a win for companies and for human rights.”
Pat Zerega, Senior Director of Shareholder Advocacy, Mercy Investment Services
“Through regulated disclosures, not only do companies and investors benefit, but we all indirectly contribute to a peaceful, prosperous, and stable conflict-free minerals trade in the DRC region, thereby further advancing respect for human rights in the global supply chains of U.S. companies.”
Susan Baker, Vice President, Shareholder Advocacy, Trillium Asset Management
“The Conflict Mineral Rule has given investors disclosures relevant to human rights risks that they deserve when making investment decisions. Borne out of bipartisan legislation it has inspired transparency in corporate supply chains and helped neutralize one of the key economic drivers of conflict in the DRC. As long-term investors we believe the rule is a positive and important step in the right direction. To weaken 1502, in our view, raises inconsistencies with the SEC’s investor protection mandate.”
Lisa Woll, CEO, US SIF: The Forum for Sustainable and Responsible Investment US SIF
“US SIF strongly supports the Conflict Minerals Rule. Investors are increasingly integrating environmental, social and corporate governance (ESG) information into the investment process. The Conflict Minerals Rule informs and improves an investor’s ability to assess global supply chain and other material risks, as well as benefiting companies and advancing human rights in the DRC Conflict minerals disclosure is material and relevant to all investors.“
Media Contacts:
Lauren Compere, Boston Common Asset Management
617-335-9764 (mobile) or lcompere@bostoncommonasset.com
Patricia Jurewicz, Responsible Sourcing Network
612-203-1467 (mobile) or patricia@sourcingnetwork.org