(Reuters) – The U.S. securities regulator has been asking money managers to explain the standards they use for classifying funds as environmental, social and governance (ESG)-focused for several months, Bloomberg News reported, citing people familiar with the matter.
This is the second such review by the U.S. Securities and Exchange Commission (SEC) after the regulator in April found “potentially misleading” claims and inadequate controls around investing in ESG issues in a review of investment advisors and funds. https://reut.rs/3yHrpLx
Investment advisers were asked to describe in “painstaking detail” the screening processes they use to ensure assets are worthy of ESG designations, according to the report on Friday. https://bloom.bg/3gZLhTU
Another SEC query sought information on ESG compliance programs, policies and procedures, the report said, citing a different source.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shinjini Ganguli)
