National Framework Is Essential for Increasing Accountability of Corporate Political Activity
Statements of Public Citizen Experts
Note: The U.S. House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets will hold a hearing this week on the need to create a standard disclosure framework for all environmental, social and governance (ESG) issues for public companies. With this framework, promulgated through the U.S. Securities and Exchange Commission (SEC), shareholders will no longer have to petition companies on a case-by-case basis for information on issues such as climate, political spending and human rights.
“Investors have the right to know if a corporation puts its money where its mouth is. Public disclosure of political activities shows investors how the corporations they entrust with their money are spending it on elections and lobbying and whether the company’s public sentiments align with their political proclivities.
“More and more investors are demanding to know which political campaigns and issues corporations contribute to, and there is a growing positive trend of corporations adopting transparency policies. These voluntary disclosures are not enough, and the lack of uniformity continues to make it impossible for investors to compare companies and make well-informed decisions. It’s time for the SEC to stop pandering to corporate lobbyists and start working for the people by creating a standard disclosure framework to keep corporations accountable.”
– Lisa Gilbert, vice president of legislative affairs
“If a company has strong oversight of its political activities, why wouldn’t it want to share that information with its investors? Today, the temptation is high for corporations to make corrupt deals with legislators while keeping shareholders in the dark. Their actions pose significant risk to shareholder value and market stability. Investors have the right to know if political involvement raises a corporation’s risks.
“This legislation is beneficial for the market, as increased transparency can promote market efficiency, protect the competitive position of American businesses and the U.S. capital markets and enhance capital formation.”
– Rachel Curley, democracy associate, Public Citizen’s Congress Watch division