Reinforcing the Investor Case: Conflict Minerals & Revenue Transparency
Calvert has been meeting with SEC Commissioners and staff to reinforce our views on key issues still at stake.
Calvert has played a leadership role in advocating for stronger corporate practices around conflict minerals and revenue transparency through legislation that is part of the Dodd Frank Wall Street Reform and Consumer Protection Act. As the complex rulemaking process surrounding Sections 1502 and 1504 of the Act reaches its final stages, Calvert has been meeting with SEC Commissioners and staff to reinforce our views on key issues still at stake. Here’s a primer on these two rules, why they are especially important to sustainable and responsible investors and how Calvert has been involved.
Section 1502 focuses on conflict minerals and requires disclosure by companies that use gold, tin, tantalum and tungsten in their products to determine whether such metals originate from particular mines in the Democratic Republic of Congo (DRC) or adjoining countries. Profits from these mines have been used to pay for weapons that have fueled the world’s bloodiest conflict since the Second World War. The proposed rules in Section 1502 will allow investors access to material information to evaluate a company’s supply chain risk in the region and distinguish companies that are managing this risk responsibly. An early supporter of the legislation, Calvert has remained fully engaged in the SEC rule-making process as part of a multi-stakeholder coalition of investors, human rights NGOs and major multinational corporations including AMD, GE, HP, and Ford among others. Last week as part of this multi-stakeholder group, Calvert met with SEC Chairman Schapiro, Commissioners Walter and Gallagher, as well as staff of Commissioners Parades and Aguilar. Additionally, Calvert brought the investor perspective to an October 2011 SEC roundtable convened to address the complex and controversial issues at stake in the rule. On February 1, Calvert submitted the following letter to the SEC which outlines five issues pertinent to investors.
Section 1504 provides investors with the information necessary to account for material and distinct social, political and regulatory risks relevant to the oil, gas and mining industries. The depletion of natural resources, such as oil, are forcing companies to take on greater risk as they employ new technologies and operate in parts of the world where they never have before. Unfortunately, investors cannot quantify an oil, gas or mining company’s exposure to risks related to a particular country or project with current disclosures. This month Calvert met with SEC Commissioners Gallagher and Walter, following up on meetings with Commissioners last year, to reinforce the message sent by a group of investors representing more than $1 trillion in assets under management that strong rules for the implementation of Section 1504 will help investors make better decisions and contribute to stability in the operating environments of oil, gas and mining companies. Calvert outlined the materiality of the disclosures required by the legislation that preceded Section 1504 in a paper released in April 2010.