The U.S. Securities and Exchange Commission (SEC) is investigating Goldman Sachs’ asset management division over certain of its ESG-themed investment funds, according to a report from the Wall Street Journal.

ESG Today has confirmed the reports from a Goldman Sachs spokesperson. Following a request for comment on the investigation, the spokesperson provided ESG Today with the following statement:

“The US Securities and Exchange Commission (SEC) has been conducting an investigation as to a historical time period for the Goldman Sachs ESG Emerging Markets Equity Fund, Goldman Sachs International Equity ESG Fund and a US Equity ESG separately-managed account offering. The assets under supervision for these strategies total approximately $725 million as of April 30, 2022. Goldman Sachs is cooperating with the SEC on this matter.”

The investigation comes as regulators around the world, are ramping efforts to fight greenwashing, in which the claims made by investors regarding the ESG or sustainability criteria used in a fund or firm’s investment process is overstated. Last month, the SEC announced that it had charged BNY Mellon Investment Adviser for making misstatements and omissions about the ESG considerations used for investment decisions in some of its mutual funds. The reports of the probe also follow the resignation of Deutsche Bank’s investment arm DWS’ CEO Asoka Woehrmann, a day after police raided the firms’ Frankfurt offices as part of an investigation into greenwashing allegations at the firm.

Firms are likely to continue to increase increasing scrutiny on their ESG claims as regulators introduce new sustainability-related reporting requirements. In May, the SEC published new proposed disclosure rules for funds and advisers that claim to integrate ESG factors into their investment products and services   , along with a proposed update to rules for the naming of funds, to ensure that names accurately describe the types of investments targeted by the fund, and doesn’t mislead investors about a fund’s investments and risks.

The new naming rules would require funds that use ESG in the name to allocate at least 80% of the fund’s assets in assets aligned with an ESG investment policy.

Goldman Sachs Asset Management has been actively growing its lineup of ESG and sustainability themed investment offerings and capabilities. In April, the firm completed the $1.9 billion acquisition of Netherlands-based sustainable investment-focused asset manager NN Investment Partners (NN IP), and the firm has recently announced moves to raise climate reporting and diversity requirements for its portfolio companies.