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  • PWC

ETF Manager Disclosure Declines

A "noticeable decline" in the level of ETF manager disclosure and transparency – likely tied to increased regulatory scrutiny has been identified in Sage Advisory Services' annual exchange-traded fund stewardship report. Its ‘2022 Annual ETF Stewardship Report’ identifies a little bit of backpedaling – a reference to the more conservative responses it received regarding respondents' environmental, social, and governance capabilities as well as this year's more generalized responses on disclosure and transparency compared with prior years. It occurred amid what has become a "much more guarded environment" as the regulatory environment has changed over the past 12 to 24 months. The 2022 report cites a "distinct change in tone" compared with responses received in prior years. Companies that had once "waxed poetic" about their voting and engagement strategies were offering more guarded answers, the report says. Regulators in the U.S. and abroad have been fining asset managers deemed to be overselling their environmental, social, and governance credentials. While ‘greenwashing’ within the industry is likely to decrease and managers likely will become more accurate in their ESG and stewardship capability descriptions, lack of transparency could become a problem. Providers might become wary about providing a full picture for fear of having regulators scrutinize every detail, it says.


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