BlackRock warns SEC about its proposed ESG rule (2022)
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Last week, BlackRock – the world’s largest asset manager, with $10 trillion in assets under management – warned the SEC about its proposed new rule for regulating ESG funds. Unlike various state attorneys general, who recently indicated that they believe the SEC is overstepping its authority, BlackRock argued that the new rule would confuse investors and would create larger problems than it solved:
"The world's largest asset manager BlackRock Inc. (BLK.N) warned the U.S. Securities and Exchange Commission (SEC) this week that its proposed rules aimed at fighting 'greenwashing' by fund managers will confuse investors.
"BlackRock made the claims in a letter filed this week in response to a SEC May proposal to stamp out unfounded claims by funds about their environmental, social and corporate governance (ESG) credentials. The rules also aim to create more standardization around ESG disclosures….
"While BlackRock acknowledged the need to boost oversight, it questioned the SEC's demand for more details on how funds should categorize strategies and describe their ESG impact, arguing such details could mislead investors about how much ESG really matters when managers pick stocks and bonds.
"'The proposed requirements would increase the potential for greenwashing and lead to investor confusion,' BlackRock wrote in its letter.
"'The granular nature of requirements will inevitably lead to the disclosure of proprietary information about these strategies, reducing the competitive advantage of those unique insights.'
"Also at issue is how the SEC's proposal outlines how ESG funds should be marketed and how investment advisors should disclose their reasoning when labeling a fund.”
See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
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