SEC Issues Proposed Rule on ESG Disclosures

The SEC has issued a proposed rule, Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices. The proposal would “promote consistent, comparable, and reliable information for investors concerning funds’ and advisers’ incorporation of environmental, social, and governance (‘ESG’) factors.” Specifically, the proposal would enhance disclosures by (1) “[r]equiring additional specific disclosure requirements regarding ESG strategies in fund prospectuses, annual reports, and adviser brochures”; (2) “[i]mplementing a layered, tabular disclosure approach for ESG funds to allow investors to compare ESG funds at a glance”; and (3) “[g]enerally requiring certain environmentally focused funds to disclose the greenhouse gas (GHG) emissions associated with their portfolio investments.”

Comments on the proposed rule are due 60 days after the date of its publication in the Federal Register.

For more information, see the press release and fact sheet, as well as statements by SEC Chair Gary Gensler and Commissioners Caroline A. Crenshaw, Allison H. Lee, and Hester M. Peirce, on the SEC’s Web site.