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Asset Managers Must Explain ‘Green’ Products, SEC’s Roisman Says

July 7, 2020, 10:22 PM

Asset managers should disclose more details about how they deploy environmental, social, and governance information for their investment products, SEC Commissioner Elad Roisman said.

The rise of investment products labeled as “ESG,” “green,” or “sustainable” can cause confusion among investors, the Securities and Exchange Commission Republican said in remarks prepared for a corporate governance conference Tuesday.

Asset managers should explain how such labels fit into a product’s characteristics, objectives, strategies, and constraints, according to Roisman. Investors might not know whether products actually are environmentally friendly, or they could be foregoing potential gains based on decisions to advance environmental or social...

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