SEC Poised to Issue New Fund Name Rules Targeting Greenwashing

The SEC is aiming to better ensure ESG funds follow environmental, social and governance investment strategies to help combat greenwashing and other misleading claims about sustainability.

The Securities and Exchange Commission will vote Sept. 20 on whether to adopt fund name rules, the agency said in a notice Wednesday. The Democratic-led agency proposed the rules in May 2022 on a 3-1 vote along party lines.

The regulations would cover “names that are likely to mislead investors about an investment company’s investments and risks,” according to the SEC’s notice. They also would require more prospectus disclosures about fund labels, the agency ...