Goldman Sachs Group faces U.S. scrutiny for funds offering investments using environmental, social and governance criteria.
The Securities and Exchange Commission’s investigation is focused on the mutual fund business within Goldman’s asset management division, according to people familiar with the matter. The agency is investigating whether some of its investments in the fund violate his ESG metrics promised in marketing materials, he said. This research relates to his two funds in that business.
Spokesmen for Goldman Sachs and the SEC declined to comment.
U.S. and European authorities are examining how companies package and bring investments to market, looking into misdisclosures and the more serious accusations of “greenwashing” or overestimating ESG capabilities. increase. Deutsche Bank and its asset manager DWS Group had their Frankfurt offices raided by police late last month in a greenwashing probe. Her Asoka Woehrmann, CEO of DWS, resigned shortly after. The company denies the allegations.
The SEC has warned money managers not to mislead investors about the criteria and methods they use to classify funds as ESG. Behind the scenes, agency staff have been pressuring financial firms to show they are delivering on their promises.
In the first half of last year, the agency launched a task force of enforcement counsel, including ESG disclosures. Around the same time, regulators released reports showing that many funds that describe themselves as ESG are not doing enough to make sure their marketing is true.
Last month, the agency agreed to pay $1.5 million to settle SEC allegations that the Bank of New York Mellon Corp. falsely implied that some mutual funds had undergone ESG quality reviews. announced.
Investigators have consistently dismissed the ESG factors used to value funds from July 2018 to September last year, even though BNY Mellon’s asset management division had told investors it was doing so. Many investments lack quality assessment scores, the regulator added.
BNY neither confirmed nor denied the SEC’s allegations, but said it had taken steps to improve communications with investors.