SEC Weighs Crackdown on Phony Environmental and Social-Justice Funds

Environmental and social justice-focused funds are booming -- so much so that the Securities and Exchange Commission is mulling new regulations to clamp down on funds that fail to back up certain altruistic claims. From a report: On Wednesday, the SEC proposed broadening the scope of its Names Rule, which enables the agency to take action against mutual and exchange-traded funds with misleading names. The amendment would require funds that use ESG (Environmental, social and governance) or similar terminology in their names to put at least 80% of their holdings into those assets. According to the SEC, the update "would help to prevent potential 'greenwashing' in fund names by requiring a fund's investment activity to support the investment focus its name communicates." The SEC first floated such a change in 2020. Should the proposal pass, it would be the first amendment to the Names Rule since it was adopted more than two decades ago. The agency also proposed upping disclosure rules for funds that market themselves under the ESG banner, mandating that they explain how they plan to track their progress towards such goals.

S&P 500 ESG

[DraconPern]

So.. any S&P 500 ESG funds where tesla was kicked out and exxon stays in.

Re:S&P 500 ESG

[tlhIngan]

So.. any S&P 500 ESG funds where tesla was kicked out and exxon stays in.

The S&P ESG is an index, not a fund. It works just like the S&P 500, or the DJIA. It just reports on the state of a few stocks.

And the ESG works just like the Greenpeace index - it's all about the paper. Remember Apple scored at the very bottom because they published nothing about their environmental efforts. Then the next year they practically aced it by basically spewing press release after press release about Apple's green initiatives. Apple didn't change anything, they just published their efforts instead of keeping it secret.

Plus, Tesla has serious management problems, being rotten from the very top. It's not just "E", but the "S" and "G" part count as well, and treating employees fairly So what Tesla has in "E", they lose out in "S" and "G".Exxon has bad "E", but better "S" and "G".

And in the end, the SEC can't really find anything. Because if you wanted a fund that follows the S&P ESG, you basically get an index fund that follows the S&P ESG. The fund isn't making any claims about what it invests it - it just invests in securities at the same ratio that the S&P ESG index uses to calculate its value.

So no, not likely to be an issue.

The SEC is going after funds that say they are "Ethical" or "Environmental" oriented which may be a load of hogwash. These are less index products but regular managed funds that invest in certain stocks. The SEC wants to make sure those funds are doing what they say. An index fund makes no claims other than basing its holdings on what is used by an index.

Re:

[Xenographic]

> The S&P ESG is an index, not a fund. It works just like the S&P 500, or the DJIA. It just reports on the state of a few stocks.

It's being used to make decisions that move tons of money.

> And the ESG works just like the Greenpeace index - it's all about the paper. Remember Apple scored at the very bottom because they published nothing about their environmental efforts. Then the next year they practically aced it by basically spewing press release after press release about Apple's green initia

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[mspohr]

The fact that Exxon is in the S&P ESG fund is all I need to know about their their "ethics".

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[slack_justyb]

So the Biden administration actually wants to crack down on frauds like BLM

Just FYI, BLM the movement is distinctly different than Black Lives Matter Global Network Foundation (BLMGN), which is the org that everyone points at that hitched up to the grassroots BLM movement to start sucking people's wallets dry.

In fact there are THREE non-profits that have hitched up to the BLM movement. Black Lives Matter Global Network Foundation just happens to be the one in the news a lot and the one with the most egregious violations of not-for-profit status. There is Black Lives Matter PAC L

Re:

[jsepeta]

absolutely zero proof that Democrats are stuffing ballots.

Elon just tweeted a link to this story

[Broom Cupboard]

and said 'Good'. Probably referring to Gates' attacks.

Call me

[Baconsmoke]

Call me when they crack down on the phony snake-oil salesmen dressed up as pastors, trying to sell you shares in heaven. These grifters have been getting away with this forever. How about the SEC takes a couple seconds to check on these bastards huh?

Re:

[kubajz]

So the first step would be to conclusively prove there is no heaven?

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[xalqor]

It's going to be hard. How many Christians have lived in the last 2000 years? And not one came back to ask for a refund... /jk

Re:

[thrasher thetic]

Calm down, Francis.

Welp...

[hsthompson69]

...I guess that means all of them.

Every environmental and social justice fund is phony.

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[DrMrLordX]

Animal Farm wasn't wrong.

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[NoWayNoShapeNoForm]

Consider the fact that George Orwell who wrote Animal Farm got it first published in England back in August 1945.

https://en.wikipedia.org/wiki/Animal_Farm

Altruism Doesn't Exits

[El Fantasmo]

FTFA: "clamp down on funds that fail to back up certain altruistic claims"

I don't believe humans are truly altruistic.

Oxford dictionary definition of altruism: the belief in or practice of disinterested and selfless concern for the well-being of others.

I you're helping create a fairer social whatever because it aligns with your ethics, morals etc. that's not altruism. You must be disinterested and selfless. I believe that is borderline impossible for humans.

If you're helping homeless people get off the st

Re:

[lactose99]

I don't believe humans are truly altruistic.

Then you're wrong.

Re:

[El Fantasmo]

Then you're wrong.

Thank you for providing a rebuttal with examples or philosophies that counter my comment. /s

Maybe I'm using the wrong definition of altruistic or maybe there's a long history of people doing things that are truly selfless and
disinterested at the scale of a society (SOCIAL justice etc.).

Two examples

[Okian Warrior]

Then you're wrong.

Thank you for providing a rebuttal with examples or philosophies that counter my comment. /s

Maybe I'm using the wrong definition of altruistic or maybe there's a long history of people doing things that are truly selfless and
disinterested at the scale of a society (SOCIAL justice etc.).

Here's two examples.

During WWII when Japanese people were being put into camps, John Fletcher [washingtonpost.com] quit his job and started farming some of the neighboring properties that were Japanese owned. He paid the taxes and mortgages, worked the farms at a profit, kept half of the profits for himself, and banked the rest. When the families were eventually let out of the camps, he returned the properties and banked profits to them.

In the aftermath of the Haiti earthquake, the US sent an aircraft carrier. We (the US) desal

Re:

[El Fantasmo]

You really think the U.S. sent an aircraft carrier to help with ZERO self-interest; ranging from the currency of good will to trying to keep as many Haitians in Haiti as possible? That's myopic.

Bob Fletcher was not disinterested, he personally knew the families and thought what was done to them was wrong. He was clearly standing up for his beliefs, i.e. interests. https://www.nytimes.com/2013/0... [nytimes.com]

Rural areas may be the least altruistic, you do things like that to sustain the community and keep close bond

but they suck at regulating Elon Musk

[jsepeta]

Elon Musk, like Donald Trump, commits crimes in full view of the world by manipulating markets via Twitter. The SEC should be going after that prick first.

A fool

[groobly]

A fool and her money are soon parted.