The SEC recently released two proposals aimed at combating “greenwashing” – misleading claims by investment funds and their investment advisers regarding their ESG credentials. The proposed rules are the latest actions in a series of concerted efforts by the SEC that specifically target ESG-related disclosure and reporting, and that, if adopted, would increase the disclosure requirements of funds and advisors who make ESG-related investments and have implications for public companies, in general. The proposals also come on the heels of two back-to-back enforcement actions in which the SEC filed complaints against companies for false or misleading claims relating to ESG practices. Collectively, these actions are a clear signals from the SEC that it is scrutinizing ESG disclosures and taking “greenwashing” claims seriously.
The comment period on the proposed rules will close on August 16, 2022. A summary and more comprehensive review of the proposed rules are included herein.