The unit didn’t have any written policies or procedures for ESG research in one of the products from April 2017 to June 2018, and once they were put in place failed to consistently follow them prior to February 2020, the markets watchdog said. The SEC said the bank’s unit didn’t properly complete ESG questionnaires on companies it planned to include in an investment portfolio prior to their selection.
The issues related to Goldman Sachs ESG Emerging Markets Equity Fund, Goldman Sachs International Equity ESG Fund and a US Equity ESG separately-managed account strategy, Goldman Sachs said in a statement. “These historical matters did not materially impact the investments’ satisfaction of the ESG criteria contained in those policies and procedures,” it said. The bank didn’t admit or deny the regulator’s findings.
The SEC under Chair
“In response to investor demand, advisers like Goldman Sachs Asset Management are increasingly branding and marketing their funds and strategies as ‘ESG,’” said Sanjay Wadhwa, deputy director of the agency’s enforcement unit and head of its Climate and ESG Task Force. “They must establish reasonable policies and procedures governing how the ESG factors will be evaluated as part of the investment process,” he added.
Goldman Sachs spokeswoman Mary Athridge said the bank is “pleased to have resolved this matter, which addressed historical policies and procedures related to three of the Goldman Sachs Asset Management Fundamental Equity group’s investment portfolios.”
(Updates with additional details on settlement starting in the third paragraph.)
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