CSA Issues Guidelines For ESG Investment Fund Disclosure To Help Prevent "Greenwashing"

The Canadian Securities Administrators ("CSA") recently published guidance (the "Guidance") for investment funds on their disclosure practices that relate to environmental, social and governance ("ESG") considerations, particularly funds whose investment objectives reference ESG factors and other funds that use ESG strategies ("ESG-Related Funds").¹ The Guidance is based on existing regulatory requirements and addresses areas of disclosure, including investment objectives, fund names, investment strategies, risk disclosure, continuous disclosure and sales communications. As the investment fund industry creates new funds and incorporates ESG considerations into existing funds to meet demand, there is an increased potential for "greenwashing" – where a fund's disclosure or marketing intentionally or inadvertently misleads investors about the ESG-related aspects of the fund. The Guidance is intended to help investment funds and their fund managers enhance