SBAI Response - SEC ESG Rule - Aug 2022

We respond to the US SEC's request for public comment on ESG disclosures for private fund advisers. Key points raised include support for the distinction between different types of ESG strategies and a requirement for a degree of flexibility for asset managers to be able to fully describe their strategies.

Key Points:

  • We are supportive of the SEC's distinction between ESG Integration, ESG Focused and ESG Impact strategies and believe this level of disclosure is important for investors to make informed investment decisions,
  • We support the SEC's focus on process disclosure but note the following:
    • Give the variety of ESG strategies any enacted rule needs to be flexible enough for asset managers to be able to accurately describe their strategy,
    • Disclosures should only be required where asset managers market their ESG credentials in any way and not from firms that make no ESG claims, and
    • The Brochure should contain all ESG information in one place rather than separate sections as described.
  • We recommend that SEC specifically include engagement in their non-exhaustive list of methodologies but that it is acknowledged that not all alternative investment strategies will be able to use this as a tool in their ESG strategies.

Note that our response includes only the sections relevant to private fund advisers and not the sections applicable for funds targeted at retail investors.