A regular briefing for the alternative asset management industry. It has been clear for some time that regulators are concerned about "greenwashing", by which they mean the risk that companies, investors and asset owners will overstate their sustainability credentials in order to attract capital. But, in the last few weeks, the regulatory pressure has significantly increased. Recent announcements from the SEC, the US regulator, and ESMA, the pan-EU supervisor, will focus the minds of all asset managers, including those running private funds.In the US, proposed new SEC rules for ESG disclosures by investment advisers will buttress an already sharp focus on sustainability claims by the Division of Enforcement. The SEC's proposal, published on 25 May, is designed to "promote consistent, comparable, reliable – and therefore decision-useful – information for investors". It will apply to all SEC-registered advisers but also (to a more limited extent) to "exempt reporting advisers", a category that includes many European firms with US investors. The change would be to Form ADV – the annual filing that investment advisers (including private fund advisers) are required to make – and would require detail on an adviser's use of "ESG factors", which are not themselves defined, as well as disclosure of third party frameworks that it uses and relationships with "related persons" who are ESG service providers.In some respects the SEC's proposals resemble the EU's Sustainable Finance Disclosure Regulation (SFDR): the US rules would require firms to categorise their investment products according to whether they "integrate" ESG factors alongside other (non-ESG) factors; whether they are "ESG-Focused", using one or more ESG factors as a "significant or main consideration in selecting investments or engaging with portfolio companies"; or whether they adopt an "ESG-Impact" strategy, and therefore target portfolio investments that drive specific and measurable environmental, social, or governance outcomes.Like the SFDR, these categories determine disclosure requirements, but are not labels: they do not guarantee any particular investment strategy or minimum ESG standards. It will be important, therefore, for the SEC to ensure that investors do not come to regard the categories as if they were labels – a significant problem with the EU rules, acknowledged by the EU regulators. But, although the scope of "ESG" is not defined in the currently proposed SEC rule, the three product categories seem clearer and easier to understand than their SFDR-equivalents.In fact, despite that similarity, the SEC's proposals for private fund advisers are much less extensive than those which apply under the SFDR. Indeed, they are also less extensive than other SEC proposals (included in the same release) for US registered investment companies and business development companies. The additional information that needs to be provided in the Form ADV should help investors to understand the sustainability features of an investment product, and help the SEC to enforce its prohibition on misleading investors, but does not extend to detailed metrics or anything close to EU Taxonomy-style reporting. The focus on "greenwashing" may be acute, but investors have largely been left to define the detail of the required reporting for themselves.Meanwhile in Europe last week, ESMA issued a wide-ranging "

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