Green Finance Briefing: SEC cracking down on ESG, and the HSBC mishap
- The SEC wants to start regulating ESG funds, requiring them to disclose additional information regarding the greenhouse gas emissions associated with their investments.
- Elsewhere, we look at the commitment gap between banks' current pledges and others' net zero strategies... also highlighted by the recent provocative speech by HSBC's head of responsible investment.
SEC steps in to regulate ESG
US regulators are starting to hone in on greenwashing, proposing a new set of disclosure requirements on ESG funds. And truth be told, there’s a lot of cleaning up to do.
ESG funds would be required to disclose additional information regarding the greenhouse gas emissions associated with their investments, such as the carbon footprint and the weighted average carbon intensity of their portfolio, according to the SEC.
This comes on the backdrop of mounting concerns over a lack of consistent standards for “sustainable” investments, with all kinds of financial instruments ranging from ETFs to derivatives being awarded the ESG stamp without much clarity behind the scenes.
The lack of disclosure requirements and a common framework tailored to ESG investing makes it hard to understand which investments or investment policies are associated with a particular ESG strategy, the commission noted.
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