SEC Proposes Stricter Disclosure of Environmental Investment Practices

On June 17, 2022, the Securities and Exchange Commission (SEC) proposed amending rules and forms to enhance disclosure requirements for ESG (environmental, social, and governance) investment practices. The proposed rules would apply to certain registered investment advisers, advisers exempt from registration, registered investment companies, and business development companies.

The proposal would categorize various ESG strategies and require funds and advisors to provide more specific disclosures. For funds focused on the consideration of environmental factors, the proposal would require the disclosure of the greenhouse gas emissions associated with portfolio investments. Furthermore, the proposal would require funds claiming specific ESG impacts to describe the specific impacts they seek to achieve and summarize their progress in achieving them.

SEC is accepting comments until August 16, 2022.