Goldman Sachs is facing an SEC investigation over ESG funds, sources say

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The Securities and Exchange Commission is investigating Goldman Sachs Group Inc.’s GS, -5.65% asset-management arm over its funds that aim to invest based on environmental, social and governance standards, according to people familiar with the matter.

The SEC’s probe is the latest known instance of regulators’ scrutiny of ESG, which aims to generate returns by picking stocks or bonds using criteria that include environmental, social and governance considerations. The ESG designation has been a boon for asset managers that struggled in recent years to compete with low-fee index funds.

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