The Investor Network on Climate Risk (“INCR”) has released a Consultation Paper in an effort to integrate sustainability disclosure requirements into listing standards for U.S. and global stock exchanges. INCR is led by Ceres and includes BlackRock, Boston Common Asset Management, British Columbia Investment Management Corporation, the AFLCIO, and other investors active on corporate social issues. The group is concerned that it is difficult to factor sustainability issues into investing decisions due to perceived insufficient and inconsistent sustainability data reporting by public companies. In addition, the Consultation Paper indicates that INCR members have heard from companies that have been reluctant to report sustainability data because they are not certain what specific information investors need or how it will be utilized.

In its announcement of the release of the Consultation Paper, Ceres stated:

The initiative is part of a growing effort by investors and stock exchanges, including NASDAQ OMX, to make environmental, social and government (ESG) disclosure a consistent requirement for corporate listings on stock exchanges. While several exchanges have adopted their own sustainability listing requirements and guidance, INCR members and NASDAQ OMX have set out to develop a uniform standard that all stock exchanges can use.

The Consultation Paper proposes three disclosure requirements as part of a listing standard:

Materiality Assessment: An assessment in annual financial filings where management will discuss its approach to determining the company’s material ESG issues, including (i) how they determine their material ESG issues, (ii) who was involved in that process, (iii) which ESG issues were determined to be material and why, including a discussion of both the risks and opportunities each issue presents as well as its connection to financial performance and business strategy, and (iv) periodic review of the materiality assessment and reporting on the frequency of such reviews.

Global Reporting Initiative (“GRI”) Content Index: A hyperlink in each company’s annual financial filings to a GRI Content Index, which will inform investors about the availability and location of a company’s ESG data.

Improved Corporate ESG Disclosure: Every company will disclose information on ESG issues, using a “comply and explain” approach, for the following categories: climate change, diversity, employee relations, environmental impact, government relations, human rights, product impact and safety, and supply chain. Companies can either provide such disclosures or explain why they are not doing so.

The initial comment period ended on May 1, 2013. INCR intends to host meetings to discuss the comments received and to attempt to develop further investor agreement. In addition, the Consultation Paper states that NASDAQ OMX has committed to engage in discussions with other stock exchanges and the International Organization of Securities Commissions to encourage the adoption of a mandatory global standard.