Around the same time, the SEC published the outcomes of two ESG-related consultations. One was on proposals to change the “Names Rule” to more precisely define how a fund’s constituent investments should be reflected in its name, and the other was on proposals for stringent ESG disclosure requirements for investment advisers and investment companies.
Many respondents have supported the proposals, the Times said, because they aim to stop “greenwashing.” But commenters have also raised concerns that they may be burdensome and prohibitively expensive for fund providers.
“With respect to the SEC proposals, I think that the proposals impose such high burdens on the industry that there is risk that they will significantly reduce the availability of ESG products, which I think is not a good result for the capital markets generally,” Georgia Bullitt, a partner with law firm Willkie Farr & Gallagher and expert on regulatory law for asset managers, told the publication.
Outside of the regulatory context, the US Forum for Sustainable and Responsible Investing (USSIF) asserted in a position paper that demand for ESG funds is still high in response to what it refers to as “politically motivated attacks” against ESG.
Contrary to claims made by many who are against the idea, the organization asserts that investing sustainably lowers risk and that ignoring ESG considerations would be a violation of an asset manager’s fiduciary duties.
