12.17.19
ESG Funds Draw SEC Scrutiny
by: Juliet Chung; Dave Michaels
The SEC has sent examination letters focused on advisors' criteria for determining whether an investment meets environmental, social, or governance (ESG) criteria. Senior SEC officials have in the past expressed concern that focusing too narrowly on corporate morality could undermine a money manager's duty to act in the best interest of clients, as some investors may not be interested in sustainability but are nevertheless locked into funds' investment choices. SEC Commissioner Hester Peirce has said, “While financial reporting benefits from uniform standards developed over centuries, many ESG factors rely on research that is far from settled.”
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