The Center for American Progress (CAP) is urging the Securities and Exchange Commission (SEC) to integrate antitrust disclosures into its environmental, social and governance (ESG) regulatory framework.
CAP maintains that requiring firms to disclose markers of market power would help socially conscious investors identify firms engaging in anti-competitive behavior, in addition to helping investors escape economic shocks in the wake of antitrust enforcement.
“Requiring antitrust disclosures is well within the mission and legal authority of the SEC,” Marc Jarsulic, a senior fellow and chief economist at CAP, said. “Requiring companies to disclose markers of their anti-competitive behavior would not only be a boon to investors, but examining them in the aggregate would also allow policymakers and the public to better understand the pervasiveness of anti-competitive behavior in the United States.”
Statistical markers identified by CAP, per officials, include ratio of market value to replacement cost of capital; profit margin; ratio of net investment to profits; and labor share in firm value added.
CAP also noted antitrust disclosure integration would ease the process of lawmakers, regulators and antitrust agencies identifying firms and areas where competition is weak, thereby improving capital markets overall functioning.
And requiring the disclosures is consistent with the mission of the SEC and well within its legal authority, per CAP.