As long as we’re on Matt Levine’s commentary on disclosures… I feel like we are getting into multiples of double negatives which isn’t helpful. Last week, Levine also offered up a view on how the SEC’s Invesco enforcement case could evolve – and it is rather provocative. He starts by pointing out that:
“there is no suggestion that Invesco tricked investors into investing in its ESG funds by exaggerating their ESG approach. Rather, the point here is that, way back in ‘between approximately April 2020 and July 2022,’ Invesco thought it was a good idea to tell potential customers that every part of its investment process was infused with ESG. ESG, Invesco was saying, was not just a part of how it ran designated ESG funds; it was part of Invesco’s DNA and its culture.”
Then he casually drops this little gem:
“… I assume the next SEC will be bringing greenhushing cases? ‘Invesco said in its marketing materials that it does not boycott fossil fuels, but in fact it runs some ESG funds that own no fossil-fuel stocks, so it has to pay up.’ Get them coming and going.”
I guess the moral of the story here is if you are an investment company or fund and are going to discuss ESG/sustainability, be very clear and specific how you implement those guidelines and have the required controls in place and well documented.
On the other hand, if you choose not to discuss ESG/sustainability, be very clear and specific how you implement (or don’t) guidelines on topics you don’t recognize, acknowledge or take action on and have controls in place and document the matter(s) you don’t recognize, acknowledge or take action on??
I don’t know – I’m confused.
Members can learn more about ESG/sustainability enforcement here.
If you aren’t already subscribed to our complimentary ESG blog, sign up here for daily updates delivered right to you.
