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  • Jean Dumarchais

The SEC proposes a new regulation for ESG related to data disclosure.

In may 2022, the ESG introduced a new regulation redefining ESG practices on the public market. BXT Consulting gives you a glimpse of the opportunities this brings for the future of sustainable investment :



The Commission is indeed considering a proposal to improve disclosures by certain investment advisers and funds that purport to take Environmental, Social, and Governance (ESG) factors into consideration when making investing decisions. I am pleased to support this proposal because, if adopted, it would establish disclosure requirements for funds and advisers that market themselves as having an ESG focus.

It is important that investors have consistent and comparable disclosures about asset managers’ ESG strategies so they can understand what data underlies funds’ claims and choose the right investments for them.

When I think about this topic, I’m reminded of walking down the aisle of a grocery store and seeing a product like fat-free milk. What does “fat-free” mean? Well, in that case, you can see objective figures, like grams of fat, which are detailed on the nutrition label.

Funds often disclose objective metrics as well. When doing so, investors get a window into the criteria used by the asset managers for the fund and the data that underlies the claim.

When it comes to ESG investing, though, there’s currently a huge range of what asset managers might disclose or mean by their claims.


“I think investors should be able to drill down to see what’s under the hood of these funds. This gets to the heart of the SEC’s mission to protect investors, allowing them to allocate their capital efficiently and meet their needs..”

As investor interest in ESG investments has grown, so too have ESG investment products and services. For example, we’ve seen an increasing number of funds market themselves as “green,” “sustainable,” “low-carbon,” and so on. While the estimated size of this sector varies, one estimate says that the “U.S. sustainable investment universe” has grown to $17.1 trillion. Suffice it to say there are hundreds of funds and potentially trillions of dollars under management in this space.

“ESG” also encompasses a wide variety of investments and strategies. Some funds screen out certain industries. Others specifically include certain industries. Others may claim to have a particular impact on an issue. Some may track board votes or make assertions about the greenhouse gas emissions, labor practices, or water sustainability of their underlying assets. Some funds involve human judgments. Others might track an outside index.


Needless to say, there’s a wide range here.

When an investor reads current disclosures, though, it can be very difficult to understand what some funds mean when they say they’re an ESG fund. There also is a risk that funds and investment advisers mislead investors by overstating their ESG focus.


People are making investment decisions based upon these disclosures, so it’s important that they be presented in a meaningful way to investors.

What information stands behind funds’ claims?

Which data and criteria are funds using to ensure they’re meeting investors’ targets?




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