Demand among investors for hedge funds with investment strategies influenced by environmental, social and governance (ESG) factors has grown rapidly in recent years. Investors require clear and meaningful information to evaluate a fund’s approach toward ESG issues, compare funds and make informed investment decisions. Although investors increasingly rely on quantitative models, ESG considerations are often subjective and are more effectively assessed qualitatively. Three SEC officials highlighted the importance and challenges of disclosures relating to ESG investing at recent events. First, Chairman Jay Clayton discussed the issues at a webinar hosted by FCLTGlobal and moderated by Mark Wiseman, chair of the Alberta Investment Management Corporation. Commissioner Elad L. Roisman later addressed the topic in his keynote speech at the Society for Corporate Governance National Conference. Finally, Commissioner Hester M. Peirce discussed the topic in her remarks at a virtual roundtable on the role of asset management in ESG investing, which was hosted by Harvard Law School. This article highlights the key takeaways from Clayton’s, Roisman’s and Peirce’s remarks. For coverage of the views of Clayton, Peirce and Roisman on the accredited investor definition, see “The Accredited Investor Definition: Proposed Changes and SEC Commissioner Perspectives (Part One of Two)
” (Feb. 13, 2020).