2021 was, without a doubt, the year of ESG Investing, but 2022 could shape up much differently as the SEC is turning its attention to ESG. There has been a wide amount of attention being given ‘greenwashing’ where companies get favorable ESG ratings despite subpar ESG performance. This is an area the SEC is warning investors about; conflicts of interest could incentivize better scores than are necessarily deserving. These issues were core to the 2008 financial crisis and are at play once again. Also, the SEC is concerned that the following ESG factors may cause a divergence from traditional methods which coil weaken the overall financial system.

FINSUM: A crackdown by the SEC might be enough to spoil the ESG party and could reveal it as the next financial bubble.