This group project is designed to provide students with opportunities to express their opinion regarding ESG disclosure guidelines for publicly traded companies. By writing a comment letter on ESG disclosure, students will be able to: 1. Describe the role of financial reporting in business decisions (LO1a, LO4a), 2. Explain the presentation of information in financial statements (LO2a, LO2c), and 3. Explain the concepts and principles underlying the preparation of financial statements (LO3c). Grades 5% will count toward the course grade. 1. Background: The business and political landscape has called for social equity, improving working conditions, environmental sustainability, and the role of companies to accomplish these goals. Often referred to as environmental, social, and governance (ESG), corporations and investment firms have focused on enhancing ESG issues that matter to enterprise value creation. The goals of ESG themes are to develop and improve ways companies can measure and integrate considerations relating to humanity, planet, as well as the prosperity of the firms. Consumers, ESG activists, and investors are also raising their voice in support for ESG investments and compliance by corporations. Such movement has shaped the operating environment for businesses to start making ESG disclosures that provide information regarding how the company integrates ESG into its strategic planning and fulfilling ESG goals, thereby delivering shareholder value and increasing the sustainability of the company. On the other hand, there are also concerns that ESG disclosures are not in line with the regulator's (the SEC's) mission. The SEC disclosure framework requires its registrants to report information that is financially "material" to investors, not information that may be important at a societal level. Ann Lipton of Tulane University discusses that corporate transparency is a function of the needs of the investing class. Even if the public demands information about firms environmental impact, their treatment of workers, their political activity, and their use of customer data, corporations are under no obligation to provide it absent a showing of relevance to an investor audience. As of the end of 2021, the SEC has not finalized its position on whether ESG disclosure should be mandated or remain voluntary, and if mandated, to what extent corporations should provide information related to ESG remains ambiguous. References Katz, D. A., and McIntosh, L. A. SEC Regulation of ESG Disclosures, 2021, Harvard Law School Forum on Corporate Governance. Poole, C., and Sullivan, K. Tectonic shifts: How ESG is changing business, moving markets, and driving regulation, 2021, Deloitte. 2. Required: Learn more about ESG governance and ESG reporting/disclosure debate by reading news articles. Read two statements by (1) SEC commissioner, Elad Roisman, and (2) Director of Division of Corporation Finance, John Coates, on their positions on ESG disclosure mandate. The statements can be found here (1) Roisman.pdf Download Roisman.pdfand (2) Coates.pdf Download Coates.pdf Read comment letters submitted by Uber and U-Haul expressing the company's position on ESG disclosure mandate. For this group project, you are going to write a comment letter expressing in favor of or against ESG disclosure mandate. Specifically, indicate whether public companies should be required to disclose ESG governance and efforts, should remain voluntary, or should not be concerned about ESG governance Provide enough supporting arguments for your position Be specific in your arguments. Discuss the pros and cons of ESG disclosure mandate why you think the SEC should or should not be involved in ESG disclosure mandate, how such mandate can be implemented by public companies if it should remain voluntary, discuss any alternative means to provide ESG information to the market, and etc. 3. Format Follow the "memorandum" format in MS word document. Take a look at sample comment letters as references. Maximum two-page, double-spaced, 12 points, Times New Roman font with one-inch margins at all corners of the page. Make sure that all group members contribute to drafting the comment letter. Each member will submit the comment letter individually. In your submission, indicate how much other group members contributed to the project using the following document Peer evaluation.docx Download Peer evaluation.docxAttach it at the end of the comment letter. Failure to attach the peer evaluation will result in a 1 point off. Save and name the file as "Lastname_Firstname_Group#.docx" and submit it under "Modules - Group project - ESG disclosure submission" by due date. No plagiarism! Your submission will automatically and immediately be checked by Turnitin. After reviewing your plagiarism report, you may re-submit your comment letter if the level of plagiarism is of concern. In other words, you have two attempts to submit the comment letter