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ESG Funds Might Soon Have to Prove to SEC They’re Actually ESG

March 2, 2020, 10:14 PM

The U.S. money management industry has experienced a boom in recent years of firms touting their commitment to green investing and buying the shares of socially-responsible companies.

Now, the Securities and Exchange Commission wants to know whether money managers are engaging in false advertising by saying funds are devoted to doing good when the reality is much murkier.

At issue are so called ESG funds, which stands for environmental, social and governance investing. Sustainable mutual and exchange-traded funds had $137.3 billion of assets under management at the end of 2019, according to data compiled by Morningstar Inc. While that total ...

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