Disclaimer: I work with impact investors and support impact investing, where a positive social or environmental impact is often considered part of the ROI. I work a lot with foundations and family offices who are trying to use (some of) their capital for the common good. It is an interesting space, and these days, heavily driven by ESG. Since ESG is sometimes a topic here on the board, I thought I would share this update from Ropes and Gray:

The Missouri Securities Division recently adopted new rules that went into effect on July 30, requiring an investment adviser or broker-dealer to disclose to clients if it 'incorporates a social objective or other non-financial objective' in its investment advice. The rule is being challenged by the Securities Industry and Financial Markets Association partly on the basis that it violates the First Amendment by requiring advisors to publicly state that ESG factors are "non-financial' even if they do not believe that to be true. In defending the rule, Missouri is now taking the position that is it is safe harbor, not a proscription. In other words, advisors do not have to disclose ESG investments unless they themselves consider them non-financial, in which case the disclosure protects them from client complaints. Missouri was clear that if the advisor themself considers ESG to be a 'financial' (i.e., risk) factor, no disclosure is required.

It will be interesting to see if other states take a similar position.

viewpoints.ropesgray.com - In litigation over its ESG disclosure rules missouri admits that ESG investing t

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