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In brief: SEC considering sustainability disclosure requirements

The regulator’s chairman told European Parliament members on Wednesday that the agency is considering how to enforce transparency rules.

The US’s chief regulatory agency is developing proposals aimed at setting transparency rules for funds marketed as sustainable investment vehicles.

In an address to the European Parliament, Gary Gensler, chairman of the Securities and Exchange Commission, said the agency is developing proposals for disclosure requirements for funds that managers pitch as specialising in green, sustainable or low-carbon investments.

“Investors in our markets increasingly want to understand the climate risks, workforces and cybersecurity risks of the companies whose stock they own or might by,” Gensler said in his remarks delivered via a video conference. “I’ve directed staff to review current practices and consider recommendations about whether fund managers should disclose the criteria and underlying data they use to market themselves as such.”

The SEC will also consider disclosure requirements regarding human capital and board diversity, Gensler added.

The chairman’s remarks follow a report last week in The Wall Street Journal about a SEC investigation into whether the Deutsche Bank’s asset management division overstated its sustainability criteria for managing assets.

Read Gensler’s full address to European Parliament members here.