{"id":25290,"date":"2024-06-18T00:00:00","date_gmt":"2024-06-17T23:00:00","guid":{"rendered":"https:\/\/www.labrador-transparency.com\/?p=25290"},"modified":"2026-06-05T15:47:21","modified_gmt":"2026-06-05T14:47:21","slug":"the-case-for-a-unified-disclosure-strategy","status":"publish","type":"post","link":"https:\/\/www.labrador-transparency.com\/en\/blog\/the-case-for-a-unified-disclosure-strategy\/","title":{"rendered":"The Case for a Unified Disclosure Strategy"},"content":{"rendered":"\t\t
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These new rules come at a time when the current disclosure landscape is already saturated. Many companies address the same topics in different communication channels. As an example, aspects of a company\u2019s human capital management and cybersecurity programs are a required component in annual reports on Forms 10-K, but in response to investor and other stakeholder interest, companies also include key aspects of those programs in their proxy statements and ESG reports. Similarly, environmental considerations and climate risk have been a key component of a company\u2019s ESG report, but proxy statements also include statements about climate oversight, goals, and progress. Companies must now conduct a different analysis under the SEC\u2019s climate rules to determine what information to include in their Form 10-K. To add to the confusion, many companies include the same or complementary disclosures on their website.<\/p>

As of September 2023, Labrador\u2019s benchmarking shows that all but one company in the S&P 250 had published a sustainability report. Many of these companies also disclose ESG information on their website and have an ESG and\/or HCM section in their proxy statement.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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This comes from Labrador\u2019s annual benchmarking exercise of the S&P 250.<\/p><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t

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With the proliferation of disclosure channels for a single topic, one of the questions that an in-house team contemplates is the depth of coverage for any key topic (beyond what is required for technical compliance) in each of a company\u2019s disclosure mediums. Should disclosures be repeated verbatim or can cross references suffice? Should different aspects of a key topic be covered in each communication with the overarching goal to reduce redundancy?<\/p>

Adding to the pressure is the increased scrutiny by investors and regulators for consistency and comparability. In 2023, the volume of SEC reviews and comment letters exceeded the volume in any other year since 20181<\/sup>. Some comment letters expressly raise consistency between a company\u2019s SEC filing and ESG report.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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  1. November 2023, Deloitte, On the Radar, SEC Comment Letter Considerations, Including Industry Insights, https:\/\/dart.deloitte.com\/USDART\/home\/publications\/deloitte\/on-the-radar\/sec-comment-letter-considerations<\/a><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t
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    Sample SEC Comment Letter: <\/strong><\/p>

    We note that you provided more expansive disclosure in your corporate social responsibility report (CSR report) than you provided in your SEC filings. Please advise us what consideration you gave to providing the same type of climate-related disclosure in your SEC filings as you provided in your CSR report.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Scrutiny is extending beyond comment letters to SEC enforcement actions. In October 2023, the SEC filed charges against SolarWinds Corp and its Chief Information Security Officer, and alleged that company management was aware of ongoing cybersecurity issues over several years but did not disclose or address them. The SEC pointed to the security statement on SolarWinds\u2019 website, which promoted its cybersecurity practices, in part as the basis for its complaint. This should serve as a renewed lesson for companies that scrutiny extends beyond a company\u2019s filed documents and to executives whose responsibilities do not include preparing SEC filings2<\/sup>. With the recently enacted rules and more on the horizon, we expect the regulatory demands and pressures to continue.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    1. https:\/\/www.whitecase.com\/insight-alert\/secs-charges-against-solarwinds-and-its-chief-information-security-officer-provide<\/span><\/a> and <\/span>https:\/\/www.davispolk.com\/insights\/client-update\/sec-enforcement-against-public-companies-recap-2023<\/span><\/a><\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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      Unified Disclosure Strategy<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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      In the midst of these increased demands, it is imperative that companies take a more proactive approach and holistically review their reports and other public statements side-by-side to ensure disclosures are decision useful, complementary, consistent, and thoughtful. This is especially important for key cross-over topics included in multiple places, like strategy, risk, climate, cybersecurity and other ESG and HCM topics.<\/span><\/p>

      While complying with regulations and meeting stakeholder expectations are the paramount objectives, simplifying reports and websites and mitigating risk caused by information overload and perceived discrepancies should also be important considerations. For that reason, companies should develop a holistic disclosure strategy that considers:<\/span><\/p>