Making Sustainability Disclosure Sustainable

Sustainability is receiving increasing attention from issuers, investors and regulators. The desire to understand issuer sustainability practices and their relationship to economic performance has resulted in a proliferation of sustainability disclosure regimes and standards. The range of approaches to disclosure, however, limit the comparability and reliability of the information disclosed. The Securities & Exchange Commission (SEC) has solicited comment on whether to require expanded sustainability disclosures in issuer's periodic financial reporting, and investors have communicated broad-based support for such expanded disclosures, but, to date, the SEC has not required general sustainability disclosure. This Article argues that claims about the relationship between issuer sustainability practices and risk management, business plan and economic vulnerability, as well as the need for investors and regulators to evaluate those claims, warrant incorporating sustainability information into SEC-mandated financial reporting. Drawing upon the existing narrative disclosure frameworks in SEC-mandated reporting requirements, the Article offers an innovative proposal sustainability disclosure -- a sustainability discussion and analysis or SD&A section of the annual report. The Article identifies critical components necessary to make mandated sustainability disclosure both practical and effective and offers a workable first step for integrating sustainability disclosure into issuer financial reporting