News & Insights

The Sec Proposes New Rule On Esg Disclosures

The Securities and Exchange Commission has proposed new regulations that could be disruptive to Financial Advisors. There are currently 12 proposals and 26 more being discussed.

One such proposal seeks to address the practice of “greenwashing”, which refers to firms or companies claiming to abide by ESG principles when they are actually not. The proposed rule seeks to enhance and standardize the disclosures of Advisers and Registered Funds, related to the incorporation of environmental, social, and governance factors into their investment strategies.

The rule would require registered advisers and exempt reporting advisers to report census-like information concerning an adviser’s ESG strategies. This would include separate ESG- related reporting for each private fund the adviser has identified. The SEC’s purpose for these changes is to promote consistent, comparable, and reliable information for investors on ESG investment practices.