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June 03, 2013
Coalition of Investors Voices Support for Conflict Minerals Rule
by Robert Kropp
Expressing their disagreement with a lawsuit filed by the US Chamber of Commerce and industry trade
groups, the group states that improved disclosure and reporting on social risk factors will protect
investors.
SocialFunds.com --
A coalition of more than 50 sustainable investor groups representing $459 billion under management
have issued a statement of support for the Security and Exchange Commission's rule
mandating disclosure of the presence of conflict minerals in corporate supply chains.
Included in the Dodd-Frank financial
reform legislation passed in 2010, the rule was finally implemented by the SEC last August and
requires that companies begin providing disclosure on the issue this year. However, the US Chamber
of Commerce, the National Association of Manufacturers (NAM), and the Business Roundtable filed a
lawsuit shortly afterward, arguing that implementation would amount to an overly burdensome cost to
companies.
In November, multi-stakeholder group led by the Responsible Sourcing Network spoke out strongly in favor
of the rule, urging "all stakeholders to continue the important work underway to address the
critical issue of transparency in the supply chains for these minerals."
"We strongly
believe these efforts are a matter of corporate social responsibility," the group stated.
The signatories to the Investor Statement include members of the Interfaith Center on Corporate Responsibility (ICCR), signatories
to the United Nations' Principles for Responsible
Investment (PRI), and US SIF: The Forum for
Sustainable and Responsible Investment.
Noting that conflict in the Democratic
Republic of Congo (DRC) has resulted in more than five million deaths and "contributed to egregious
human rights abuses," the coalition stated, "As investors and fiduciaries with a long-term view of
capital appreciation that must meet the interests of multiple generations of beneficiaries, we
believe it is important to protect investors through improved disclosure and reporting on social
risk factors such as labor practices and human rights."
"Requiring disclosure within a
company's supply chain allows investors to evaluate supply chain policies and practices, to make
company-to-company comparisons, to calculate the level of risk associated with conflict mineral
sourcing, and to provide assurance that companies are not engaging in destabilizing activities,"
the statement continues.
Boston Common Asset Management is a signatory to the
Investor Statement, and Managing Director Lauren Compere was kind enough to direct me to a number
of recent developments relating to conflict minerals.
A report from the Enough
Project reveals that "the passage of the conflict minerals legislation within the Dodd-Frank
Wall Street Reform law and new tech industry sourcing policies have helped lead to a 65 percent
drop in armed groups' profits from the trade in tin, tantalum, and tungsten" over the past two
years.
However, the Investor Statement warns, "Any stay in legislation would hinder a
much needed leverage point to address one of the root causes of the ongoing violence that has
plagued the Congo for many years."
Notwithstanding the arguments put forth by the trade
groups in their lawsuit, several companies in the information technology sector are members of the
multi-stakeholder group organized by the Responsible Sourcing Network, Compere pointed out.
"Companies have emphasized that they are working to ensure compliance with the rule and that
that should be a company's top priority � regardless of the lawsuit," she wrote in an email.
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