As investment advisers report that client interest in environmental, social, and governance (ESG) investing is on the rise, the Securities and Exchange Commission (SEC) has launched an investigation into the criteria and methodology used to select the organizations that are considered to be under the ESG umbrella. Investment advisers have welcomed this scrutiny and say that the regulatory move could build a stronger foundation for ESG investing and the construction of ESG portfolios. “The SEC might be doing us a favor. [It] could help clarify the criteria. There have to be ways of measuring different issues for different kinds of companies,” said Allan Moskowitz, principal at Transformative Wealth Management.

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