May. 19, 2022
May 19, 2022 Hi, I am a controller for a publicly traded investment company with over 15 years of industry experience. I would like to remain anonymous as my views expressed here may not express the views of my company or the industry. Climate risk is an investment risk. The investment management industry has been striving to implement ESG investing over the past 5-10 years. These are loose standards currently being implemented by many asset managers, which need structure and form from the SEC. Many current implementations result in greenwashing which don't benefit current stakeholders or the future generations of stakeholders. I support detailed climate disclosure for the underlying portfolios of investment companies. The investment companies should not be exempt from this rule. The compliance with the rule is the only way for an investor to truly understand the ESG compliance of an asset manager. To be clear, the asset managers should disclose climate risk and greenhouse gas emissions of each portfolio company and then disclose a climate score of the entire portfolio. This rule would ensure certain asset managers to stand out and allow public and investors to make educated decisions based not only on the financial performance of the fund, but also the climate risk of the portfolio. Admittedly, the cost of compliance will be high at first, but the long term transparency provided will outweigh the initial upfront cost.