WASHINGTON—Regulators proposed new requirements for investment funds that tap into public angst about climate change or social justice, in an effort to address concerns about “greenwashing” by asset managers seeking higher fees.
The Securities and Exchange Commission voted Wednesday to issue two proposals that aim to give investors more information about mutual funds, exchange-traded funds and similar vehicles that take into account so-called ESG—meaning environmental, social and corporate-governance–factors. One of the proposed rules would broaden the SEC’s rules governing fund names, while the other would increase disclosure requirements for funds with an ESG focus.