Curtis, Fisch, and Robertson's article, Do ESG Mutual Funds Deliver on Their Promises, is a timely and insightful piece with several important conclusions. This Comment offers three principal observations to add to the commentary on the article: (1) Securities and Exchange Commission regulations that would require stricter definitions and more robust disclosure are important for the health and legitimization of the environmental, social, and corporate governance (ESG) market; (2) climate risk is financial risk—investors want to make money, and the ESG market is providing them with an opportunity to do so; and (3) despite the positive results identified by studies like that conducted by Curtis et al., at the state level, several problematic bills have been passed to restrict investment practices by prohibiting the consideration of ESG and other factors, and these bills are projected to cost taxpayers millions of dollars. In short, the Comment asserts that the Curtis et al. article is an important contribution to our understanding of the importance and effects of ESG investing, and that policymakers at the federal and state levels would do well to allow financial disclosure to do what it does best: enable investors to make informed choices to reduce financial risk, which these days must include climate risks.

Environmental, social, and governance (ESG) investing is a strategy for allocating investment funds on the basis of the extent to which the operations of a company, or a portfolio of companies, affect the environment, advance social justice, or follow good corporate governance practices. It is of intense and increasing interest to millions of investors who seek to minimize financial risks and maximize their financial returns. It also appeals to investors who seek to align their investments with their core personal values. An important question is how the Securities and Exchange Commission—and to a lesser degree, the U.S. Department of Labor—should regulate ESG investment offerings in mutual funds and other types of funds. In Do ESG Mutual Funds Deliver on their Promises, Curtis, Fisch, and Robertson conducted some empirical analysis, which indicated that ESG mutual funds really do offer their investors increased ESG exposure, vote shares in ways that support the ESG principles, and do so without increasing costs or reducing returns for investors. But the authors contended that, in light of their study, there is no reason to single out ESG funds for special regulation or what they refer to as “regulatory intervention.” This Comment asserts that there are still good reasons for additional regulatory requirements governing ESG funds, and that regulation in the ESG market is necessary not only to protect investors, but also to foster an environment in which it can thrive.

Corporations have received growing criticism for their role in climate change, perpetuating racial and gender inequality, and other pressing social issues. In response, shareholders are increasingly focusing on environmental, social, and corporate governance (ESG) criteria in selecting investments, and asset managers are responding by offering a growing number of ESG mutual funds. But are these funds giving investors what they promise? This Article provides a unique picture of the current ESG environment with an eye to informing regulatory policy. It finds that ESG funds offer their investors increased ESG exposure, vote their shares differently from non-ESG funds, and are more supportive of ESG principles; and that they do so without increasing costs or reducing returns.

The Environmental Law and Policy Annual Review (ELPAR) is published by the Environmental Law Institute’s (ELI’s) Environmental Law Reporter in partnership with Vanderbilt University Law School. This Comment highlights the results of the ELPAR article selection process and reports on the environmental legal scholarship for the 2021-2022 academic year, including the number of environmental law articles published in general law reviews versus environmental law journals, and the topics covered in the articles. It also presents the top 20 articles that met ELPAR’s criteria of persuasiveness, impact, feasibility, and creativity.