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OSC urged to tackle corporate social disclosure: report

Date: Wednesday, June 16, 2010
Author: Investment Executive

A report to Ontario’s Minister of Finance calls on the Ontario Securities Commission to begin pushing companies for improved disclosure of their social practices.

The report, produced by the Hennick Centre for Business and Law and Jantzi-Sustainalytics, stresses that “the OSC is uniquely positioned to take a leadership role in promoting better corporate social disclosure, as well as the development of best practices over time.”

It says such a step would improve governance and disclosure practices, and help Ontario lead the way in this emerging public policy sphere (which includes human rights and labour practices, employee health and safety, local community development, and product safety).

The report calls on the OSC to issue guidance clarifying issuers’ existing social disclosure obligations in their management discussion & analysis and annual information forms, as it has done with environmental reporting obligations.

It also recommends the commission:

- foster a dialogue between investors, issuers, industry associations, regulators and others regarding social disclosure;
- encourage, without imposing prescriptive new rules, more standardized metrics and reporting in this area; and
- actively monitor disclosure trends and related internal controls, providing additional guidance as best practices evolve.

“The recommendations and discussion set out in this report provide valuable and timely insights on public company social issue disclosure obligations,” said Dwight Duncan, Ontario finance minister. “I appreciate the efforts of those who contributed to this report and look forward to reviewing the recommendations in greater detail.”

Kevin Ranney, global director, responsible investment services at Jantzi-Sustainalytics, added, “There is growing momentum in a number of jurisdictions around the world to enhance corporate disclosure on environmental, social and governance performance. The OSC has an opportunity to play a leading role in this area, and our recommendations suggest some concrete steps that it can take in doing so.”

The report is available at: www.hennickcentre.ca and www.sustainalytics.com.