On 25 May, the Securities and Exchange Commission (the SEC) introduced a proposal to amend certain rules and forms under the U.S. Investment Advisers Act of 1940 (the Advisers Act) and the U.S. Investment Company Act of 1940 (the Company Act) to provide what the SEC describes as greater transparency to investors about the environmental, social, and governance (ESG) factors in certain investment products, especially for those investment funds marketing themselves as having ESG-focused strategies. The SEC does not currently mandate specific disclosures by funds or advisers with respect to ESG, instead applying existing anti-fraud and marketing rules and regulations that apply to all disclosures, including ESG matters. In emphasizing special risks to investors in ESG-focused investment products, the SEC intends the proposed rules to provide investors with consistent, comparable and reliable information about funds and ESG strategies. In particular, the SEC expressed concern about “greenwashing,” the notion that funds or advisers may overemphasize the role that ESG factors play in their investment decisions.