Investor body Principles for Responsible Investment (PRI) has issued a warning that the U.S. Securities and Exchange Commission’s proposed ESG disclosure rule could be viewed as a marketing tool.

The PRI, with over 5,000 signatories and approximately $121 trillion in assets under management, proposed a list of 11 recommendations on the proposal, as part of the financial regulator’s consultation process.

In its submission, the UN-backed organization cautioned that “market participants may view the proposed rule as a labelling and thus a marketing regime.”

It told the Commission, “The finalized rule should provide market participants with as much clarity as possible on the proposed categories and whether they can and should be understood as sustainability or ESG-related labels or not.”

PRI’s consultation response, released on August 16, largely agrees with the proposals set forth by the SEC, but has put forward a number of amendments it believes are necessary in order for the rules to “allow for evolution of ESG practices to better understand and align with investor and market goals.”

Included in these recommendations is a response to the potential risk of funds claiming to consider ESG, without clarifying the steps they are taking. PRI stated, “In order to most effectively address greenwashing, any disclosure requirements should, at minimum, present a description of actions taken in relation to any claims of ESG consideration, as stand-alone statements of “considering ESG” may not present useful information to investors.”

PRI consulted with its signatories which include pension funds, insurers, investment managers, and service providers and reported common concerns with the strictness of the proposal.

Concerns were also raised that the overly prescriptive or unclear disclosure requirements could disincentivize further ESG integration and consideration by adding liability and costs.