Required ESG disclosures to present data challenges (FundFire)

As the SEC’s ESG rules move closer to finalization, reporting requirements to achieve compliance with the rules are being closely scrutinized by money managers. The required data reporting would likely have a large impact on private funds, including real estate and infrastructure fund managers. According to Amy Lynch, FrontLine’s Founder and President, the proposed rules would push these firms to disclose certain data not previously provided, creating concerns over how to appropriately gather and document it. She comments that the guidance in the rules intends to provide more structure on what can and can’t be done when presenting data while requiring a break down by the different levels of fund investment. Ms. Lynch also notes that an objective of the reporting and disclosure requirements is to introduce a loose standardization for informing investors on ESG and climate risks. See FundFire (subscription required), “SEC’s ESG, Climate Rules Stir Up Questions for Real Asset Managers”