Jefferies Says Asset Managers Need to Act on ESG Ahead of Rules

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Asset managers should start aligning themselves with sustainable investing-industry standards and audit their non-financial information in anticipation of increased oversight by the U.S. Securities and Exchange Commission, Jefferies Financial Group Inc. said.

Money managers shouldn’t wait for government rules for environmental, social and governance investing to be enacted, Aniket Shah, global head of ESG research, wrote in a note to clients Tuesday.

The SEC created an enforcement task force in March to analyze disclosure and compliance issues relating to ESG investments. The task force will be “actively looking” for cases of misleading claims, material misstatements and prior tips from whistleblowers, Shah said.

For a roundup of ESG stories: See NI ESGDAILY.

“Be on the lookout for what they’re doing, as the first few cases will be very instructive,” he said.

Shah advised asset managers to align with efforts such as the Value Reporting Foundation and Task Force on Climate-related Financial Disclosures, understand the SEC’s definition of “materiality” and collorabate with industry peers to help learn about regulatory requirements.

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