The Social Investment Organization supports new Ontario Securities Commission guidelines on corporate environmental disclosures, but has called for additional disclosure on climate change issues.

In a brief to the OSC April 21, the SIO said it supports a recent OSC staff notice published on environmental disclosure.  The guidance looked at environmental disclosure by a sample of issuers, and found the disclosures to be inadequate.  Specific guidance is included in the staff notice so that corporations can improve their environmental disclosures.

"We agree with your assessment that, in many cases, issuers fail to adequately report their environmental issues, "states the SIO.  "Your guidance provided through the comments section of the report is very helpful."

The staff notice provides guidance on the following issues: environmental liabilities, asset retirement obligations, financial and operational effects of environmental protection requirements, environmental policies fundamental to operations and environmental risks.  For liabilities, asset retirement obligations, protection requirements and policies, OSC staff advise corporations to attempt to develop quantitative measures on these issues to disclose in their annual filings.  In terms of risks, the OSC advises corporations to describe the risks in as detailed a manner as possible so that investors can assess these risks for themselves.

In the brief, SIO disputes suggestions by some lawyers that the staff notice may prompt litigation by some shareholders.

"We believe that additional information to investors on material issues is a good thing, and may actually help to reduce litigation in the future by providing investors with early signals of environmental risks and opportunities." states the brief.

The brief also urges the OSC to specifically address the issue of climate change disclosures, and issue that was missing from the staff notice.

"Climate change issues are of critical importance to the investment community, largely because of the scale of estimated future environmental, social and economic impacts, "states the brief.  It notes that the Canadian Institute of Chartered Accountants is reviewing existing draft guidance on climate change disclosure.  The SIO urges OSC to review this guidance when it is released, and include it in a new staff notice.

For a copy of the OSC staff notice, visit:

http://www.osc.gov.on.ca/Regulation/Rulemaking/Current/Part5/sn_20080229_51-716_enviro-rpt.jsp

For a copy of the SIO brief visit:

http://www.socialinvestment.ca/documents/OSCEnvironmentalReportingStaffNoticeApril081.pdf.

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