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Patience and Sunshine
By Steve Schueth

We've all heard the phrase, 'good things come to those who wait.'  Wikipedia says "it's an English phrase propounding the virtue of patience."  Among other things, it has been used as the basis for advertising campaigns promoting Heinz ketchup in the U.S. during the 1980s and Guinness stout in the UK in the 1990s.

We have waited a long time for this 'good thing.'  When I worked in Washington, DC in the early 1990s I was involved in some of the very early conversations in which representatives of the social investment industry began asking regulators to require companies to be more forthcoming about environmental risks to their businesses. 

At times over the years, shareholder activists have quoted Supreme Court Justice Louis Brandeis who famously said, "Sunshine is the best disinfectant." 

Now these two famous phrases-the one about 'good things' and the one about 'sunshine'-come together to describe a dramatic turn-around within the Securities and Exchange Commission (SEC), the federal regulator for all publicly traded companies on U.S. exchanges. 

The New York Times reports that the Commission is taking a "serious look at requiring corporations to assess and reveal the effects of climate change on their financial health." 

"Advocates are increasingly hopeful that the SEC will move rapidly to issue formal guidance instructing companies to delve deeply into the climate issue to understand how it could increase their risks related to physical damage, financial loss and legal liability." 

In addition to managing business risk, we advocates believe that the 'sunshine' of transparency may also be a way to encourage more companies to design and manufacture products that are lighter, simpler, cheaper, smarter, less wasteful, less toxic, less resource-intense, reusable, and recyclable. 

Mary Schapiro took over as Chairwoman of the Commission in January 2009 and "has signaled that greater transparency in the financial markets is needed."  It's no secret that the SEC has come under a barrage of criticism for taking a mostly hands-off regulatory approach over the past eight years and contributing to the financial freefall.

Isn't it interesting how good things sometimes evolve from bad things.  Well, it's about time.

Steven J. Schueth

Posted: July 14, 2009