U.S. securities regulator scrutinizes funds over ESG labels -sources

Sept 3 (Reuters) – The U.S. securities regulator has been asking money managers to explain the standards they use for classifying funds as environmental, social and governance (ESG)-focused for several months, according to two sources familiar with the queries.

U.S. Securities and Exchange Commission staff have been pressing firms for details on how they determine these classifications, two sources with direct knowledge said. Earlier this year, the regulator said it had found “potentially misleading” claims and inadequate controls around investing in ESG issues in a review of investment advisors and funds.

SEC examiners have been scrutinizing investment advisers in recent

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