As part of the ESG-Focused Reviews, staff identified a number of sales communication issues relating to misleading or inaccurate ESG-related statements, or statements that otherwise conflicted with prospectus disclosure.
The most common types of sales communication issues identified in the ESG-Focused Reviews are described below:
- Statements about ESG-related investment objectives and strategies: One of the most common issues raised by staff in relation to sales communications involved statements regarding the fund’s ESG-related investment objectives or strategies that were misleading or inconsistent with the fund’s prospectus disclosure.
Some of the sales communications indicated that the fund’s ESG focus was broader than the ESG focus identified in the prospectus, such as referring to “ESG” or “social responsibility” where the focus of the fund was only one aspect of ESG, such as environmental factors or an even narrower focus, such as screening out fossil fuels. There were also inconsistencies between the description of specific ESG strategies or factors in the prospectus as compared to the sales communication.