The U.S. Securities and Exchange Commission (SEC) has become increasingly focused on how companies disclose their environmental, social, and governance (ESG) initiatives and risks. The agency has recently taken steps to strengthen its oversight of ESG reporting, including issuing guidance on climate change disclosures and proposing new rules for public companies to report on human capital management.
The SEC's Division of Corporate Finance has been reviewing company ESG disclosures and providing feedback to issuers when there are deficiencies or inconsistencies in reporting. The SEC also conducts periodic examinations of investment advisers and their ESG investing practices to ensure they are following best practices and accurately disclosing their strategies.
Overall, the SEC's increased scrutiny of ESG disclosures reflects a growing importance and demand for such reporting by investors and other stakeholders.
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