September 25, 2022

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Goldman Sachs is being investigated over ESG funds

Goldman Sachs is being investigated over ESG funds

The Securities and Exchange Commission at Goldman Sachs is investigating ESG mutual funds — funds that invest in companies that it says adhere to environmental, social and governance principles, according to two people familiar with the matter.

The two people, who spoke on condition of anonymity because they were not authorized to comment publicly on the matter, said the agency is studying ESG mutual funds overseen by the bank’s asset management unit. The Wall Street Journal I mentioned earlier in the investigation.

The Securities and Exchange Commission declined to comment.

Regulators have stepped up their scrutiny of sustainable investing, which is becoming increasingly popular, but it has been They were criticized for their lack of accountabilitywith the request of legislators and investors to do so rein in.

ESG reporting emerged as a top priority for the Securities and Exchange Commission under the agency’s presidency, Gary Gensler. Earlier this year, the panel proposed changes that would require more disclosure from companies to investors about the risks that climate change and new government policies about it might pose to their operations. And last year, the organizer Formation of an Environmental, Social and Institutional Governance Task Force To focus on whether Wall Street firms and companies are misleading investors about investment and business standards in the ESG areas.

The investigation into Goldman Sachs’ mutual funds appears to be linked to the new enforcement initiative. Last month, the investment advisory arm of Bank of New York Mellon Paid about 1 million dollars To settle an investigation by the Securities and Exchange Commission into allegations that it omitted or misled investors about ESG’s criteria for valuing investments. The Securities and Exchange Commission is also looking into Deutsche Bank.

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Abroad, authorities are also ramping up their investigations into how companies market ESG standards. Asuka Warmann, Head of Asset Management at Deutsche Bank, Resigned This month after the company’s Frankfurt office was raided over allegations it had exaggerated its claims on ESG in May, HSBC suspended Stuart Kirk, who led the responsible investment in the asset management unit after he said policy makers have exaggerated the risks from climate change.