The U.S. Securities and Exchange Commission fined a Goldman Sachs division $4 million on Tuesday, saying it had misled customers on investments advertised as having an environmentally friendly focus.

The charges covered “policies and procedures failures involving two mutual funds and one separately managed account strategy marketed as Environmental, Social, and Governance (ESG) investments,” the SEC said in a statement.

The financial giant did not admit or deny guilt in paying the fine, the SEC noted.

Goldman Sachs appears above a trading post on the floor of the New York Stock Exchange on Dec. 13, 2016.

“Goldman Sachs Asset Management, L.P. is pleased to have resolved this matter,” the company said in a statement, declaring itself “committed to its pursuit of best practices across its portfolios for sustainable, long-term value creation that helps its clients meet their investing needs.”

Between April 2017 and February 2020, Goldman Sachs Asset Management took its time crafting written policies and procedures for ESG — but didn’t follow them, the SEC said.

“Today’s action reinforces that investment advisers must develop and adhere to their policies and procedures over their investment processes, including ESG research, to ensure investors receive the advisory services they would expect to receive from an ESG investment,” stated Andrew Dean, co-chief of the SEC enforcement division’s asset management unit.

The ESG investment movement aims to consider environmental, social and corporate governance issues when deciding how to invest public funds such as pension plans. The movement has gained traction in recent years among institutional investors such as university and foundation endowments.

With News Wire Services

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