our policy views

The rules intended to protect investors in the United States include laws, regulations and court rulings at both the state and federal levels. Among other matters, these rules regulate the obligations of corporate directors to shareholders, of investment fiduciaries to beneficiaries, and of corporations to investors. 

The rules are often interpreted as if the only financial concern that investors have is the financial performance of individual companies. However, as we discuss here, most shareholders investors have a significant financial interest in how portfolio companies impact environmental and social systems because the health of such systems is critical to the financial return of a typically diversified portfolio. This idea is discussed in detail in our climate case study.  

We believe that our financial system requires fundamental reform to root out practices that prioritize the financial return of individual companies over the health of the systems that support all companies and the human beings they are meant to serve. In order to accomplish this change, it is critical that legislators, regulators, and courts clarify that the impact that companies have on the economy and diversified portfolios is material to most investors, and that laws meant to protect investors recognize that principle.  

We support the changes to laws and regulations that clarify that: 


Corporation law enables directors and officers to account for the impact that their decisions will have on the diversified portfolios of their shareholders, as argued in this recent case in the Delaware Court of Chancery.


Fiduciary duties of institutional investors allow them to account for the financial impact that individual portfolio companies have on other portfolio companies in making stewardship decisions, including proxy voting and corporate engagement, as explained in a recent report commissioned by the Principles for Responsible Investing.


For securities law purposes, the impact a company has on society and the environment is material to investors to the extent that those impacts effect the systems that support other companies, for the reasons described in this comment on the reporting standards to be promulgated by the International Sustainability Standards Board.

We also support:


Securities regulations that enable shareholders to engage with companies on systemic issues that are likely to impact the performance of diversified portfolios, as articulated in this brief to the District Court for the District of Columbia.


Securities and antitrust rules that create safe harbors for collective shareholder action.

Together, we're embarking on a fundamental transformation of our financial system...