SEC rule proposals seek consistency of ESG guidelines (Fund Directions)

The SEC has been clear that it views tightening ESG guidelines as a priority for its agenda and rule proposals. The view from the regulator is that investors need consistent definitions of certain ESG terms and criteria used by money managers, removing the threat of greenwashing to entice investments. Another focus area of the SEC is to enforce the accuracy of ESG fund names with the Naming Rule so that they are appropriately labeled based on investment criteria. FrontLine’s Founder and President Amy Lynch states that applying the naming convention with ESG funds is a straightforward approach as long as names are not too restrictive and inconsistent with investment decisions. See Fund Directions (subscription required), “SEC to pitch long-awaited ESG rule May 25”