SEC Director Defends Proposal to Better Police ESG Fund Names

A senior SEC official dismissed concerns of agency overreach in a proposal intended to ensure environmental, social and governance fund names correlate with sustainable or socially responsible investing.

Fund labels are “extraordinarily important,” William Birdthistle, director of the Securities and Exchange Commission’s Division of Investment Management, said Tuesday. The SEC has faced criticism from the funds industry, which supports updating name rules, but objects to the agency stressing labels’ importance compared to other disclosures “I don’t really believe that the industry doesn’t think that names are important.”

• The proposal is meant to better combat greenwashing under rules that generally ...