March 30, 2020 The Corporate Social Responsibility Newswire

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Widespread SEC Disclosure Noncompliance Triggered by Material ESG Issues

Submitted by: CSR Insight™ LLC

Categories: Research, Reports & Publications, Corporate Governance

Posted: Feb 06, 2000 – 09:00 AM EST


NEW YORK, Feb. 06 /CSRwire/ - Widespread corporate noncompliance with SEC requirements triggered by material ESG issues may cause many SEC filings to be materially misleading, inaccurate, or even fraudulent, finds the first independent, comprehensive technical study of how the SEC regime applies to ESG issues, conducted by CSR Insight™ LLC.  Corporate noncompliance also triggers SEC liabilities and disclosure requirements for corporate boards, auditors, and registered investment advisers and funds.

More than a dozen SEC requirements potentially apply, for 10-K, 10-Q, 8-K, and other corporate SEC filings, including narrative disclosure and financial statement requirements, books and records requirements, and management certification requirements.  Corporate noncompliance also triggers auditor liabilities and potential violations under the current SEC regime. 

The study found a substantial likelihood of widespread corporate noncompliance with one or more of these SEC requirements, due in major part to the inadequacies of most current enterprise software systems, both internally developed and vendor-purchased.  What is lacking is the integration of the full range of ESG issues and risks and the associated additional SEC requirements into ERM, GRC, risk management, performance management, and financial information systems, and necessary linkages amongst these enterprise systems.  This systems integration capacity is necessary for companies to properly identify, evaluate, measure, manage, and monitor these complex, escalating issues and risks, including their nature, magnitude, probability, timing, and business and operating model impacts.

This noncompliance not only undermines investor protection and efficient capital formation, but can have potentially significant ripple or knock-on effects for other market participants and global capital market activity.

For example, corporate noncompliance creates additional SEC disclosure requirements, liabilities, and risks for corporate boards, and for registered investment advisers and funds, including registered private equity and hedge funds.  Corporate noncompliance also can undermine corporate transactions, such as M&A, IPOs, and secondary capital raises.

This is the first in a series of news releases by CSR Insight™ LLC.  Future releases will provide further highlights of CSRI’s analyses of SEC and global financial regulation applicable to ESG issues.

About CSR Insight™ LLC

CSR Insight™ LLC, founded in 2007, is an independent consultancy specializing in analysis of SEC and global financial regulation, global financial regulatory policy, ESG reporting frameworks, ESG capital market issues, and international corporate governance standards.  CSRI has completed a unique, independent five-year Global ESG Regulatory Research Program, and has developed the first educational “Library of Congress” Knowledge Base of global ESG regulatory and market intelligence, available in 2012, designed to educate market participants, stakeholders, academia, policymakers, and regulators on a comprehensive range of key ESG regulatory, economic, industry, and capital market issues.

CSR Insight is a syndicated partner of CSRwire and has been a contributing member since 2008. For further information, contact CSR Insight™ at or visit


All content contained in this news release is provided for informational purposes only and does not constitute advertising, a solicitation, or legal or other professional advice, and is provided with the understanding that CSR Insight™ LLC, and its authors and publishers, are not engaged in rendering legal or other professional advice, and assume no liability whatsoever in connection with any use of the content in this news release.  This news release reflects the current opinions of CSR Insight™ LLC and may change without notice.

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