US SEC Strengthens ESG Fund Inspections

Source: WSJ

[Asia Economy Reporter Yujin Cho] The U.S. Securities and Exchange Commission (SEC) is stepping up its scrutiny of 'ESG funds' that invest in companies excelling in environmental, social responsibility, and governance indicators.

According to the Wall Street Journal (WSJ) on the 3rd (local time), the SEC plans to examine whether ESG funds have actually purchased stocks that align with their stated objectives and whether the invested companies' environmental policies have been effectively implemented.

ESG, a non-financial factor, has not been a core element in investment decisions until now, but it has recently emerged as a key keyword determining the direction of global investment assets, coinciding with the adoption of green energy policies worldwide.

According to U.S. financial services firm Morningstar, as the impact of climate change on corporate management activities grows, ESG funds attracted a record-high inflow of $51.1 billion (approximately 57.36 trillion KRW) last year.

The SEC is also considering mandating disclosure of related information to reflect climate change risks in the management evaluations of listed companies.

Gary Gensler, nominated as the first chairman of the SEC under the Joe Biden administration and former commissioner of the U.S. Commodity Futures Trading Commission (CFTC), stated at his Senate confirmation hearing the day before that he would review whether enhanced disclosures related to climate change and other issues are necessary for listed companies.

Gensler said, "We are integrating considerations of climate change and ESG into the overall regulatory framework."

The new regulations are expected to require listed companies to transparently disclose any climate-related risks they face and their compliance with related obligations, ensuring that investors have sufficient information when making investment decisions.

The WSJ evaluated this move as aligned with trends such as BlackRock, the world's largest asset manager, urging investee companies to participate in achieving 'net zero' carbon dioxide emissions by 2050.

This content was produced with the assistance of AI translation services.