SEC Sets Comment Deadline for Proposal on ESG Disclosure

Comments are due by August 16, 2022 for an SEC proposal to expand disclosure requirements on investment advisers and investment companies that consider environmental, social and governance ("ESG") factors in their investment decisions. The SEC proposal was published in the Federal Register.

As previously covered, the proposed amendments to the rules and forms in the Advisers Act and the Investment Company Act will require:

• any fund that says it considers ESG factors to provide details of the impact ESG plays in determining its investment strategy;

• ESG-focused funds to provide additional disclosures that include a standardized ESG strategy overview; and

• "impact" ESG funds to disclose progress the funds are making towards reaching their ESG-related goals.

Additionally, these investment companies will be required to disclose their goals and the metrics used to measure progress, and certain of the funds will be required to report their data on greenhouse-gas emissions.