Investors are pouring record amounts of money into passive ESG funds. But the vagueness of just how money managers determine the makeup of their sustainable funds is now attracting attention from regulators.

Why it matters: Investors are paying high management fees for these "socially responsible" funds, Axios' Felix Salmon and I report. It's important that they get what they pay for.

By the numbers: The average expense ratio, or how much companies charge to manage an exchange-traded fund, for ESGs is 0.42%, according to ETF.com.

• Compare that to the average expense ratio of 0.15% for non-ESG passive funds last year, with a growing number of ETFs having no management fees at all.

Driving the news: The SEC is reportedly examining "advisers' criteria for determining an investment to be socially responsible and their methodology for applying those criteria and making investments," per the Wall Street Journal.

• SEC examiners — which can offer recommendations to the regulators' enforcement arm — sent an undisclosed number of letters inquiring about firms' stock-selection methodology, as well as their proxy voting records with respect to ESG issues.

Context: There still aren't any specific definitions or standards for "ESG” in the U.S.

• That means ESG funds can get away with investing in oil and gas giants, as the WSJ reported — though those companies are often targets of social activists.
• It also means that funds dedicated to investing in companies with women on boards can vote against gender and diversity shareholder proposals without losing its self-appointed ESG status.

Meanwhile, EU lawmakers today took the “first step for establishing a framework“ for a system that determined which investments could be called ”green” or ”sustainable,” Reuters reports.

The bottom line: Industry wonks have voiced concern about potential issues of the opacity of the asset class — but the SEC's reported interest is going to be taken much more seriously by ETF managers.

• What they're saying: "[T]he lack of transparency and basic guidelines [for sustainable investing] creates industry wide credibility challenges," researchers at Yale University researchers wrote in a 2017 report.

Felix’s thought bubble: ESG fund managers have had no incentive to complain in public about competitors that don't live up to their marketing materials. No one wants to be the person saying that the asset class is problematic.

• But now that significant money is flowing into ESG funds, the SEC looks as though it's inclined to impose some much-needed discipline.

Sustainable funds have seen record net flows this year.

• Yes, but: It still pales in comparison to ETF total net flows.

Boeing had hoped to continue producing the 737 MAX at a reduced rate until the FAA issued the green light to resume flying.

• But with the timing of such approval still uncertain, Boeing's board decided Monday to suspend production of its best-selling plane starting in January, Axios' Joann Muller reports.

Why it matters: Boeing's decision to indefinitely halt production of its controversial 737 MAX will test the resilience of its sprawling global supply chain — and of the U.S. economy, with its impact on the tens of thousands of aerospace workers and on the airlines waiting for planes to be delivered.

By the numbers: As of yesterday's close, Boeing shed about $60 billion in market cap value since shares peaked in early March, days before the grounding of the 737 MAX.

The big question is not about Boeing itself, but its suppliers — and the impact the production halt can have on thousands of workers at those feeder companies.

• Roughly 80% of the 737's components are produced elsewhere and shipped to Boeing for final assembly.
• One example: Spirit AeroSystems in Wichita, Kansas, supplies the plane's fuselage and now aircraft bodies "are sitting like cord wood outside the factory," aerospace industry expert Robert Mann tells Axios.

Yes, but: Boeing, which has already announced $8 billion in charges from the crisis, has been able to soften the blow for Spirit and perhaps other critical suppliers, up to this point.

• Boeing provided a $123 million cash advance, for example, to Spirit in the third quarter to ease working capital issues.
• Still, Spirit has cut 200 jobs through early retirements and sharpened its focus on cost-cutting.
• "We've run scenarios at all different levels of production. And it really depends on when the MAX goes back into service and how Boeing decides to manage its production schedule," Spirit CEO Thomas Gentile told analysts in October.

Go deeper: Read Joann's full story here, and sign up for her weekly Axios Navigate newsletter here.

Unrest in Hong Kong led to as much as $5 billion of capital outflow from investment funds since April, the Bank of England estimates. (Reuters)

A whistleblower’s complaint about what they allege is the Mormon Church’s misuse of funds offers a rare look into the finances of the church. (The Washington Post)

Netflix released revenue and subscription data that shows the service grew fastest in regions outside of the U.S. and Canada from 2017 to 2019. (Axios)

The top groups that ran ads for the U.S.-Mexico-Canada Agreement cumulatively spent over $4 million pushing the passage of the trade pact, according to data from advertising research firm Advertising Analytics, Axios' Sara Fischer and I report.

Why it matters: The majority of advertisers for USMCA-specific ads were business-backed trade groups — a nod to big corporations' anxiety to draw attention to the issue.

The big picture: While the stock market hasn't paid nearly as much attention to the deal as it has to the U.S.-China trade war, businesses have voiced concern about uncertainty caused by USMCA's stalled progress. They upped spending on lobbying, too.

• And, the Fed noted progress on the deal was good for the economy.

But, but, but: Business groups have since expressed dissatisfaction over changes to the deal. In fact, the "Pass the USMCA Coalition" has since said it "has no position on USMCA as it is written now," per The Hill.

Axios' updated tracker of almost 170 health care companies shows the industry saw earnings drop 18% year-over-year in Q3.

Yes, but: The industry still churned out a 6.1% profit margin, and health care stocks are at the highest they've been all year because Wall Street foresees a very profitable election year, Axios' Bob Herman reports.

• Flashback: Earlier this year, when health care profits were at record highs, Wall Street was bearish because algorithms and traders were triggered at the thought of Medicare for All and drug pricing reforms.