The Securities and Exchange Commission (SEC) has fined the investment management arm of Bank of New York Mellon (BNY Mellon) $ 1.5 million for misrepresenting funds that select stocks that use environmental, community and environmental criteria (ESG).
On Monday, the SEC said it had agreed to pay the amount after regulators discovered that some of the mutual funds managed by the SEC had not been subjected to ESG quality review between July 2018 and September 2021.
In a statement, BNY said that none of the six funds in question were part of its specific fixed funding. The company said it had updated its investor communications products to be more accurate and complete.
Regulators are struggling to sustain the ESG investment boom, which has recently raised trillions of dollars in assets managed by these funds. There are certain standards for creating an ESG stock or bond, which has led some analysts to say that big banks and asset managers do. ” Green wash“(Green wash, in free translation) – Use of responsible nicknames on products that do not meet these criteria.
Many sustainability-focused equity funds support the shares of large technology companies such as Microsoft, which have good scores on the ESG rating, but they already dominate the stock market, and some observers question how much they actually benefit the environment.
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