Over the past few decades, investors have become increasingly concerned not only with the short term profits of their investments, but also the long-term viability of the public companies in which they invest. As a result, investor calls for corporate disclosures of a company’s environmental, social, and governance (ESG) policies, practices, and impacts as a means to assess the long-term health, profitability, and viability of companies have also increased. In response, public companies have begun voluntarily disclosing ESG information, and U.S. allies and peer countries have begun to, or have already enacted, mandatory reporting on ESG issues. The United States’ lack of action puts the country at risk of falling behind the global curve in mandating the disclosure of ESG issues important to investor assessment of long-term profitability. Common misconceptions about ESG reporting must be addressed in order to push forth meaningful reporting requirements that respond to investor needs.
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