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SEC Examiners Uncover Problems With Investment Firms’ ESG Claims

April 9, 2021, 9:46 PM

Investment advisers and funds are issuing potentially misleading statements about environmental, social, and governance investing, the Securities and Exchange Commission said.

SEC examiners found that firms had proxy voting procedures, portfolio management practices, and other policies that were inconsistent with their publicly stated ESG approaches, the agency said in a risk alert Friday.

The SEC’s Division of Examinations also observed some firms heavily involved in ESG didn’t have policies and procedures for investing analyses, decision-making, or compliance reviews on the issue, according to the alert.

“The Division encourages market participants promoting ESG investing to clients, prospective clients, investors, and prospective ...