Report: Advisers Receiving ESG Inquiries from SEC

According to a Bloomberg report, for several months SEC  examiners have been requesting that firms provide explanations on the standards they use to classify funds as ESG-focused. In letters sent out this year, SEC examiners asked advisers to detail the screening processes they use to ensure assets are worthy of ESG designations and requested information on how firms were addressing different jurisdictions’ requirements, Bloomberg wrote. In a recent speech, SEC Chairman Gary Gensler noted that many funds these days brand themselves as “green,” “sustainable,” “low-carbon” and that he has “directed staff to review current practices and consider recommendations about whether fund managers should disclose the criteria and underlying data they use to market themselves as such.” Recently, German and U.S. authorities, launched investigations into Deutsche Bank AG’s asset-management arm DWS Group after a former senior executive alleged the firm exaggerated the environmental credentials of some investment products.