Purpose Contests OSC Action Over Historical ESG Disclosures

TORONTO, Sept. 12, 2025 (GLOBE NEWSWIRE) -- Purpose Investments Inc. (“Purpose”) today announced that it will vigorously contest an enforcement action brought by the Ontario Securities Commission (the “OSC”) against it and CEO Som Seif for how Purpose communicated its pioneering approach to ESG integration between 2019-2022.

Purpose’s Approach to ESG Integration

Purpose’s approach to ESG integration was born from a fundamental conviction that environmental, social, and governance factors could add genuine value to investment outcomes, not just serve as a values-based screening mechanism. Rather than creating separate ESG-specific funds while leaving the rest of the existing funds business unchanged, Purpose pioneered an approach that had the goal of embedding ESG data and considerations as an investment process input factor.

Although novel at the time of inception, industry adoption has ultimately validated Purpose’s innovative approach. A recent Fraser Institute report shows that 88% of investment professionals now use third-party ESG ratings as part of their portfolio security selection process, with 92% expecting to do so in the future. The investment world has broadly moved toward the ESG integration model Purpose pursued and was one of the first to adopt. These firms are not ESG companies – they are integrating ESG as a consideration in their investment process and a value-added factor, exactly what Purpose envisioned.

What This Case is Actually About

The OSC has as its mandate: “To provide protection to investors from unfair, improper or fraudulent practices, to foster fair, efficient and competitive capital markets and confidence in the capital markets, to foster capital formation, and to contribute to the stability of the financial system and the reduction of systemic risk.”

The OSC was recently quoted in the Globe & Mail about its need to prioritize 'the most egregious' cases due to resource limitations. Purpose struggles to understand how a proceeding alleging no investor harm, no prospectus misrepresentation, and no disclosure deficiencies in core documents aligns with the OSC’s stated focus on serious matters requiring urgent regulatory attention. Put simply, it is hard not to see this proceeding as anything but a misallocation of the OSC’s limited resources that could be better employed to tackle issues resulting in direct financial harm to the investing public.

Instead, in Purpose’s and Mr. Seif’s case, the OSC is focussing on much narrower issues such as the form of certain public communications referencing ESG, the data sources used by the company to evaluate ESG factors and whether or not ESG factors were applied consistently by Purpose, despite the fact that Purpose’s communications were sufficiently clear from the outset about Purpose’s approach to ESG integration.

“We are struggling to understand how the OSC is seeing this as a topic for enforcement action against Purpose, and even more specifically against me. The OSC is not alleging investor harm or prospectus violations, nor is this case based on investor complaints during the period in question about the way our vision was delivered. Frankly, we believe this process is not supported by the facts,” Mr. Seif said. “While it may have been expedient to accept a settlement, we determined that such an outcome would not have reflected our principles or our responsibility to our investors and the public. Our decision to contest this matter reflects our commitment to standing up for what is right and upholding the highest standards of transparency and integrity.”

Purpose’s practices have been transparent, responsible, and aligned with investor interests. Purpose believes the OSC’s concerns reflect interpretive questions about evolving ESG standards rather than any substantive breach. Purpose also questions the OSC’s motivation in naming Mr. Seif individually as part of its enforcement action against the company.

The Path Forward

Although disappointed by the OSC’s approach, Purpose views this enforcement action as part of the complexity that comes with being one of the first to market with new approaches and innovating in areas where the regulatory framework has not yet reached a level of full maturity.

“My relationship with the OSC spans well over two decades and has been overwhelmingly positive and productive. Throughout my career, I have driven meaningful change in Canada's financial services industry, helping to make investing better for all Canadians,” Mr. Seif said. “Although I am disappointed with the OSC's decision to pursue this enforcement action, I remain deeply committed to making the financial industry better for all Canadians. I will always continue to support the OSC and the broader Canadian Securities Administrators in their important work.”

“We’ve never shied away from the challenges of innovation,” Mr. Seif continued. “We remain committed to building solutions that serve Canadian investors’ best interests. We look forward to presenting our perspective through the appropriate channels and demonstrating that our approach was both innovative and appropriate.”

The company believes the tribunal process will provide Purpose with an opportunity to show how its ESG integration methodology was developed transparently and in good faith to benefit Canadian investors.

About Purpose Investments
Purpose Investments Inc. is an asset management company with more than $26 billion in assets under management. Purpose Investments has an unrelenting focus on client-centric innovation and offers a range of managed and quantitative investment products. Purpose Investments is led by well-known entrepreneur Som Seif and is a division of Purpose Unlimited, an independent technology-driven financial services company.

Media Contact:
Meghann O’Hara Fraser
Chief Marketing Officer
Purpose Investments
meghann.fraser@purpose.ca

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