SEC investigating Goldman Sachs for ESG claims


The US Securities and Exchange Commission is investigating Goldman Sachs’s asset administration division over sure environmental, social and governance claims made by its funds, in keeping with a supply aware of the matter.

The civil investigation is scrutinising sure Goldman Sachs funds with clear vitality or ESG of their names, in keeping with The Wall Street Journal, which first reported the investigation. Goldman rebranded its Blue Chip Fund because the US Equity ESG Fund in June 2020, the report stated.

An individual aware of the state of affairs confirmed the report. Additional particulars couldn’t instantly be gleaned. Goldman Sachs declined to remark and the SEC didn’t reply to requests for remark.

The investigation marks the newest growth within the SEC’s hunt for potential greenwashing. In 2021, the company’s enforcement arm launched an ESG process pressure to analyze sustainability claims by funding managers and firms. In May, BNY Mellon grew to become the primary asset supervisor to settle with the company for allegedly deceptive buyers about ESG claims.

The SEC alleged that BNY Mellon Investment Adviser advised in paperwork that every one investments within the funds had undergone an ESG high quality overview, although that was not all the time the case. BNY Mellon, which paid a $1.5mn tremendous, stated it up to date its fund paperwork.

The BNY Mellon case was seen because the tip of the iceberg within the SEC’s ESG enforcement efforts. The company had been investigating fund corporations on ESG and a few of these inquiries have been referred to the enforcement division, sources aware of the matter have stated.

“I think it is highly likely that . . . we will see more cases similar to the BNY Mellon case,” stated Kristin Snyder, a former deputy director within the SEC’s examinations division who’s now a accomplice at Debevoise & Plimpton. “I would expect to see additional cases before September 30”, when the SEC’s fiscal yr ends, she added.

Authorities are additionally investigating DWS, Deutsche Bank’s asset administration division, for potential greenwashing. Earlier this month, DWS chief government Asoka Wöhrmann resigned hours after the corporate’s workplaces in Frankfurt have been raided and proof was seized by police investigating claims of greenwashing. DWS has denied wrongdoing.

The SEC additionally lately proposed guidelines figuring out what language a mutual fund can use to explain itself as environmentally pleasant.