Today is Earth Day, and various governments once more caution the people to be conscientious about our plant. Since last February, the U.S. Securities and Exchange Commission has warned several times about the wide variety of climate-related risks facing investors and businesses. The SEC also declared that the money-management industry mislabeled ESG funds as green when they aren’t in reality.
ESG or Environmental, social, and governance criteria is a set of various standards for a firm’s operations. Investors, who are Socially conscious, use these criteria to screen potential investments. For instance, Environmental criteria contemplate how a company performs as a steward of nature. Moreover, Social criteria observe how it manages relationships with customers, employees, suppliers, and the communities where it operates. Lastly, Governance deals with a company’s leadership, internal controls, executive pay, shareholder rights, and audits.
ValueWalk's Raul Panganiban David Barse, Founder and CEO of XOUT Capital, and discuss his unique approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with XOUT Capital's David Barse
What Is The SEC Planning Regarding The Subject?
Gary Gensler, President Joe Biden’s appointee to lead the SEC, stated last week that the agency plans to toughen oversight as compared with the previous administration. He also indicated that he would maintain the same focus on ESG issues as Allison Herren Lee, who served as acting chair.
The SEC is one of the world’s most influential financial regulators, and it has accomplished a 180-degree turn in only a few short months for the 51st anniversary of Earth Day.
The agency made clear its new direction on Feb. 26 by issuing a bulletin to educate investors and businessmen about environmental, Governance, and social funds. The bulletin laid out key questions that the customers should ask before doling out any money.
After that, the SEC announced that ESG subject is one of its top priorities, along with climate-related risks.
According to the SEC, it will monitor proxy voting practices and policies to ensure voting aligns with investors’ expectations and best interests. It will also examine a firm’s business continuity plans in light of increasing physical risks associated with climate change.
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