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BlackRock Warns SEC’s Plans on ESG Disclosures Will Backfire

  • ‘ESG Integration’ label poses greenwashing risks, firm says
  • Money manager, trade groups want SEC to nix it from May plan

BlackRock Inc. is warning US regulators that new rules to fight greenwashing by fund managers could sow more confusion and make investors think their holdings are more socially conscious than they really are.

The firm is pushing back on a key detail in a proposal to require managers to say more about how environmental, social and governance issues fit into strategies for funds that also consider myriad other factors. The result, BlackRock said in a letter this week to the US Securities and Exchange Commission, could mislead investors about how much ESG really matters when managers pick stocks and bonds.