The SEC has recently turned its attention to the environmental, social and governance (ESG) strategies and practices employed by fund managers, with the SEC’s Office of Compliance Inspections and Examinations (OCIE) explicitly identifying ESG as a priority in 2020. The Commission has already implicitly begun this process, however, through targeted ESG‑related questions in recent SEC examinations of certain fund managers. In light of this scrutiny, fund managers must ensure they know the risks associated with ESG investing and take steps to mitigate them. To assist with this effort, the Private Equity Law Report surveyed industry practitioners and recent SEC document request lists (Sample SEC Request) to parse the scope of the Commission’s review of ESG investing and prescribe ways fund managers can prepare. This second article in a two-part series describes the disclosure, operational and investment risks associated with ESG investing, and provides some key takeaways for fund managers to follow to avoid SEC scrutiny. The first article detailed the areas targeted in the recent Sample SEC Request and what it portends for the overall scope of future Commission examinations of ESG efforts by fund managers. See our two-part series on the use of ESG factors in fund investing: “Past, Present and Future” (Nov. 10, 2016); and “Designing an ESG Investing Policy” (Nov. 17, 2016).