The Securities and Exchange Commission, the regulatory agenc...

The Securities and Exchange Commission, the regulatory agency for the stock market, has plans to propose new requirements requiring more disclosure on ESG funds to avoid less greenwashing.

ESG funds are investment mutual funds or exchange-traded funds (ETFs) that include companies that claim to achieve goals for lowering climate change, decreased carbon emissions, more corporate governance and social justice.

The amount of capital to ESG funds has increased.

Issuance in these assets rose to $1.6 trillion in 2021, resulting in a total market exceeding $4 trillion. Bloomberg has estimated ESG assets to be at least $53 trillion by 2025.

The commissioners for the SEC will vote on two proposal that give investors more details about ESG funds and ETFs.

If the two proposals pass the SEC, the public will have two months to comment on the topic before the agency rules.

One of the two proposals would increase the SEC's rules about the names of the funds. The other proposal would add more disclosure requirements for funds with an ESG angle.