August 9, 2022

MSRB Summarizes Findings on ESG Practices in Muni Market

The MSRB summarized responses to a Request for Information ("RFI") on ESG practices in the municipal securities market.

As previously covered, the MSRB requested information on (i) the disclosure of related risk factors and practices and (ii) the labeling and marketing of municipal securities with ESG designations. In the RFI, the MSRB posed specific questions to municipal issuers, investors, dealers, advisors and other market participants.

The MSRB cautioned that ESG practices in the municipal securities market are still evolving. The self-regulatory organization highlighted responses expressing concern that premature regulatory action may impede development of best practices. The MSRB found that market participants favor a market-based solution in response to ESG considerations.

In their responses, market participants encouraged the MSRB to update its Electronic Municipal Market Access ("EMMA") website as a first step towards mitigating the challenge of ESG integration. Additional recommendations included (i) improving investor access to disclosures, (ii) clarifying any issuer self-designations, (iii) making ESG-related information and documentation provided by issuers easier to locate on the EMMA website and (iv) publishing third-party information.

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