Could the new SEC "Names Rule" kill ESG funds?

Could the new SEC "Names Rule" really kill ESG funds as this article suggests? It seems very doubtful, but whether you agree with the linked article or not, it does provide an interesting perspective.

There were some other tidbits in the final rule release. For example, the SEC did not decide to prohibit the use of ESG terms in the names of what it proposed to label "integration funds" (essentially funds that consider ESG issues when making investment decisions but do not treat ESG considerations determinative).

Interestingly, the SEC proposed to define the term "integration funds" in the Names Rule identically to how it proposes to define the term in broader ESG disclosure rules for investment managers that remain pending.

The SEC's omission of the term "integration funds" in the Names Rule raises the question of whether the SEC is reconsidering the term altogether, although we probably cannot read too far into the omission. The SEC appears to argue that the expanded scope of its 80% rule may already prevent integration funds from using words like sustainable, green, or socially responsible in their names. Thus, it is unclear if the prohibition was needed in the first place.

A more interesting question may be whether any ESG funds subject to the new Names Rule will consider becoming private funds. This would be a complicated proposition for many, but it would allow them to avoid the enhanced risk of an SEC "greenwashing" case due to ambiguities that remain in the final rule.

The final Names Rule is available here if you are interested in reviewing it -- https://www.sec.gov/files/rules/final/2023/33-11238.pdf.