On September 17, 2020, SEC Commissioner Hester Peirce gave a speech that focused on potential issues raised by investment advisers that—while purporting to follow environmental, social and governance (“ESG”)-labeled investment strategies—did not, in Commissioner Peirce’s words, “walk the ESG walk.”
Her comments are the latest reminder that, while the SEC has continued to struggle with whether to mandate specific ESG disclosures, there seems to be consensus behind the SEC’s focus on determining whether advisers’ disclosures concerning ESG are sufficiently accurate and understandable. Thus, asset managers would be well served to review and, where warranted, enhance their ESG-related disclosures and compliance policies in an area where the SEC’s Enforcement Division may well be looking to bring cases.
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