I think that ESG will remain a buzzword until the regulations tighten and companies are forced to take more responsibility.
Greenwashing remains a risk because of the demand for funds with ‘ESG’ in their name and marketing materials. A genuine substantive policing of ESG claims seems possible but difficult. If, for example, the SEC imposed restrictions on funds labelled ‘ESG’ then it would be a significant extension of its current role.
However, given the SEC recently charged BNY Mellon Investment Adviser Inc. for misstatements and omissions about ESG considerations in making investment decisions for funds, we could see a wave of ESG enforcement actions and increased responsibility for funds. This could reduce Greenwashing and drive improved ESG regulation.