(Reuters) -U.S. regulators have been peppering firms offering funds that are marketed as sustainable with queries for several months, including how they lend out their shares and whether they recall them before corporate elections, Bloomberg News reported.
The U.S. Securities and Exchange Commission’s probe is focused on whether managers of environmental, social and governance (ESG) funds are trading away their right to vote on such issues, the report said on Monday, citing four people with knowledge of the matter. https://bloom.bg/3dy8I80
The investigation delves into whether asset managers are making the proper disclosures to investors, according to the report.
The SEC declined to comment to a Reuters request.
Regulators have been making efforts to contain the risk of money managers overstating the ESG credentials of their products, which have racked up trillions of dollars.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Aditya Soni)