The Securities and Exchange Commission (SEC) Division of Examinations is set to make ESG one of its examination priorities in 2023, with a focus on advisory services and fund offerings.

In a February 7 press release, the SEC stated that the division will be examining whether funds are operating within the manner set forth in their disclosures, if ESG-related products are being appropriately labeled, and whether the recommendations of products for retail investors are made in the investors’ best interests.

“Our priorities reflect the changing landscape and associated risks in the securities market…We will emphasize compliance with new SEC rules applicable to investment advisers and investment companies as well as continue our focus on emerging issues and rules aimed at protecting retail investors,” said Division of Examinations’ Director Richard Best.

The SEC has recently come under fire over concerns that its own environmental disclosure rules are overly burdensome, and is understood to be considering making the requirements less onerous than originally proposed in March 2022.