Shutdown Threatens to Undercut SEC’s Momentum on ESG Oversight

SEC Chair Gary Gensler is gaining momentum on his ESG agenda with new investment fund names rules targeting greenwashing, just as a looming government shutdown threatens to pause work on climate disclosure mandates and other rulemaking.

The Securities and Exchange Commission on Sept. 20 adopted regulations intended to better safeguard investors from funds with misleading environmental, social and governance names and other deceptive labels. ESG funds, for example, now must invest 80% of their assets in ways their names suggest, in keeping with requirements for many other investment products.

These are the first ESG-related rules finalized this fall. The agency ...