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ESG funds transparency rule gets push from democratic lawmakers

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on Bloomberg Law or enjoy below:

🗞️ Driving the news: A coalition of 21 Democratic lawmakers has called on SEC Chair Gary Gensler to finalize a transparency rule for ESG-marketed investment funds
• This proposed rule, initiated in 2022, targets mutual funds, exchange-traded funds, and similar financial products, demanding clearer disclosures regarding their ESG claims

🔭 The context: The push for this rule aligns with other SEC initiatives aimed at curbing greenwashing in the financial sector
• In September of the previous year, the SEC established a rule to scrutinize ESG labels on investment products, complementing the current proposal

🌍 Why it matters for the planet: This regulation aims to ensure that funds claiming to be sustainable are transparent about their environmental impact, thereby aiding investors in making more informed decisions aligned with their environmental values

⏭️ What's next: As the SEC faces litigation delaying other climate-related disclosure rules, the completion of this ESG transparency rule could set a precedent for stricter regulatory oversight on sustainability claims within the investment sector

💬 One quote: "Finalizing this rule is critical for addressing greenwashing and other exaggerated or unfounded ESG-related claims amongst funds and investment advisers," the lawmakers wrote in their letter

Click for more news covering the latest on ESG

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