In the third blog of our ESG series, we examine how the SEC’s proposed changes impact private funds and the similarities between the SEC’s Proposed Amendments and other ESG regimes. 

In this second blog of the ESG series, we examine the proposed ESG-related disclosure and reporting requirements for investment advisers through amendments to Form ADV, Part 2A (“the Brochure”). The Proposed Amendments require investment advisers to disclose their ESG investing approach by strategy, relationships with related persons, and any ESG-related impacts on proxy voting. These proposed changes will likely apply to wrap fee funds too. 

As global regulators are intensifying their focus on “greenwashing”, the absence of standardization or a common disclosure framework frustrates investors and their managers. Across the industry, there is a well-recognised lack of consistent and comparable data which may lead to potential greenwashing and is making the regulators’ and managers’ jobs ever more challenging and burdensome regarding regulatory data management.