Shutdown Threatens to Undercut SEC’s Momentum on ESG Oversight
- Media Manager
- Sep 21, 2023
- 1 min read
Bloomberg Law
Written By: Andrew Ramonas
Published: September 22nd, 2023
SEC Chair Gary Gensler is gaining momentum on his ESG agenda with new investment fund names rules targeting greenwashing, just as a looming government shutdown threatens to pause work on climate disclosure mandates and other rulemaking.
The Securities and Exchange Commission on Sept. 20 adopted regulations intended to better safeguard investors from funds with misleading environmental, social and governance names and other deceptive labels. ESG funds, for example, now must invest 80% of their assets in ways their names suggest, in keeping with requirements for many other investment products.
These are the first ESG-related rules finalized this fall. The agency is looking to build on that momentum by issuing final rules requiring greenhouse gas emissions disclosures in October, according to its latest rulemaking agenda. But it’s unlikely to finish that requirement or advance other significant ESG rulemaking before a potential government shutdown Oct. 1.
Gensler said this week that he’s concerned about the SEC’s ability to oversee financial markets during a shutdown. The chair added that he doubted a closure would ultimately thwart his rulemaking agenda.
“We don’t do it against a clock,” Gensler told reporters in response to questions from Bloomberg Law Sept. 20. “When the staff gets through all the comments, we serve up recommendations to the commission.”
