SEC Chair Gary Gensler has been saying change is overdue. The regulator wants to bring fund names more in line with the investments that funds hold.

“A fund’s name is often one of the most important pieces of information that investors use in selecting a fund,” Gensler said May 25 at an SEC vote in favor of tougher standards. He had no further comment for this story.

But fact is, truth-in-labeling is thorny in ESG because the language is so slippery. While ESG investing has exploded into a more than $35 trillion global business from closer to $23 trillion in 2016, the industry hasn’t settled on exactly what “ESG investing” is or isn’t.

Even specialists concede that the various terms can mean different things to different people.

“There certainly has been a huge expansion in everything that might be loosely or in a broad sense considered ‘ESG,’ but there are multiple ways that people interpret what that means,” said Cheryl Smith, who oversees ESG investments as a portfolio manager at Boston-based Trillium Asset Management. “We’re very much in favor of a truth-in-labeling kind of rule.”

Others are less charitable.

“ESG marketing by the large asset managers has largely been misleading,” said Ben Cushing, who focuses on fossil-fuel-free finance at the Sierra Club, the 130-year-old environmental organization. Ordinary investors are often led to believe investment funds are focusing more on the climate, the environment or social issues than they are, he said.

“I think that’s why it’s really important we’re seeing regulatory action on this,” Cushing said.

Given its size, BlackRock can’t escape attention. Lately, Chief Executive Officer Larry Fink has taken flak from all sides for promoting ESG-style investing. On the political right, BlackRock has been criticized for bowing to anti-business forces. On the left, it has been criticized for not doing enough.

It has certainly been a roundabout trip for what’s now BlackRock Sustainable Advantage. The fund started out in 2015 as the BlackRock Impact US Equity Fund. At the time, BlackRock Impact promoted itself as way to invest in companies with “positive aggregate societal impact outcomes.”

There was no shortage of ambition. An in-house quantitative analysis team, then known as the Scientific Active Equity unit, was going to crunch all the numbers. A new website,, was going to court customers. The head of impact investing at the time said demand from clients was “unprecedented.”

Reality fell short of the exuberant expectations. The fund averaged annualized returns of about 13% in its first four years. However, net flows through November 2019 totaled just $78 million, according to Morningstar data.