The Securities and Exchange Commission is investigating Goldman Sachs for its ESG investment funds, which invest in companies that claim to be committed to environmental, social and governance principles, according to two people familiar with the matter.
The agency is examining ESG investment funds overseen by the bank’s asset management unit, the two people said, speaking on condition of anonymity because they were not allowed to publicly comment on the matter. The Wall Street Journal reported earlier on the investigation.
The SEC declined to comment.
Regulators have stepped up scrutiny of sustainable investment vehicles, which have become increasingly popular, but have also been criticized for their lack of accountability, and lawmakers and investors are calling for control.
ESG reports have become a top priority for the SEC under the agency’s president, Gary Gensler. Earlier this year, the commission proposed changes that would require more public disclosure to investors about the risk that climate change and new government policies in this regard could pose to its operations. And last year, the regulator set up a special ESG working group to focus on whether Wall Street companies and firms were misleading investors about their investment and business criteria in the environmental, social and of government.
Goldman’s mutual fund research appears to be related to the new execution initiative. Last month, Bank of New York investment advisory group Mellon paid about $ 1 million to settle an SEC investigation into allegations it had omitted or misled investors about its ESG criteria for evaluate investments. The SEC is also investigating Deutsche Bank.
Abroad, authorities are also stepping up their investigation into how companies market ESG criteria. Asoka Woehrmann, head of Deutsche Bank’s asset management business, resigned this month after the company’s Frankfurt office was attacked on charges of exaggerating ESG claims In May, HSBC suspended Stuart Kirk , who directed the responsible investment to his asset management unit after telling him. policymakers had exaggerated the risks of climate change.