Summary List Placement
Timothy Massad, known for ushering in tighter post-financial crisis swaps market regulation when he ran the US Commodity Futures Trading Commission during the Obama administration, is joining a sustainability-focused asset management startup as an advisor.
He will help guide Ethic, a New York-based company that builds tailored portfolios aligned with clients’ values for financial advisors and institutional investors like endowments, through an evolving regulatory landscape that could see changes to the way wealth and asset managers evaluate companies’ sustainability.
He will primarily advise Ethic’s leadership team on evolving sustainable investing regulation, though he may also directly engage with regulators and Ethic’s clients. The startup oversees some $760 million in assets as of March 26, with some $702 million in assets under management and $57.5 million under advisement, according to a filing.
“There are going to be different views on how you best achieve long-term value; what should your policies be about; how you affect the communities and the constituencies you serve — not just shareholders, but employees and customers,” Massad told Insider. “So what we want are more fulsome standards of disclosure on all those things.”
Massad took over the CFTC in 2014 from Gary Gensler, the newly confirmed SEC head, and stepped down in January 2017. He is also a research fellow at the Harvard Kennedy School and an adjunct professor at Georgetown Law. Massad, who is based in Washington, DC, joned Ethic starting this week.
The former regulator’s new role with the 6-year-old startup highlights the rapid growth and heated debates around the environmental, social, and corporate governance (ESG) investing industry.
Sustainable funds drew $185 billion in net inflows during the first quarter, with record global sustainable flows for the fourth straight quarter, according to Morningstar data. Global sustainable funds had just under $2 trillion in assets — primarily in Europe with 83% of those assets, followed by the US with 12% — at the end of the first quarter.
As asset managers continue launching new products into the ESG universe and demand for these products grows, so too has criticism of the industry’s rampant “greenwashing” problem, or sustainable products improperly marketed as environmentally friendly.
President Biden’s financial regulators have signaled they will start to more closely scrutinize ESG issues as investors challenge the merits of what makes a product “sustainable.” The SEC’s office of the investor advocate last year recommended that the regulator finally create a framework for evaluating companies’ ESG disclosures.
In March, the Securities and Exchange Commission launched a climate and ESG-focused task force within its enforcement division to root out “ESG-related misconduct,” like false statements about an investment’s climate risks — greenwashing, in other words. The SEC also started accepting public comments on climate-related disclosures.
Comparable disclosures would be useful for investors to properly assess companies’ long-term sustainability, Massad said.
“But what I think would be unfortunate is if it becomes so homogenous, or so standardized, as to not really be all that informative,” he said.
Ethic has raised $48.8 million over three funding rounds since its founding in …read more
Source:: Businessinsider – Finance
Marvel Studios & Disney+ | SUPER BOWL 2021 | Promo