Vanguard and BlackRock are now facing more scrutiny over ESG investing, as both asset managers have reportedly cancelled public engagement meetings with companies, as they review the consequences of new Securities and Exchange Commission guidance. The new SEC reporting guidance, released earlier this month, redefines how investor activism is regulated.

The SEC has placed more restrictive regulations on asset managers that may attempt to influence the conduct of companies in which they invest by requiring extended disclosures from shareholders with a large equity stake in a company who engage with management on ESG topics. The SEC recommends that an asset manager undertakes “specific actions on a social, environmental, or political policy.”Under SEC’s Schedules 13G and 13D, which govern disclosure of beneficial ownership of a company, a group of shareholders who own more than 5% of a company must report their ownership.


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