Goldman Sachs Asset Management: A Commitment to Sustainability or a Missed Opportunity?
Goldman Sachs Asset Management has positioned itself as a leader in sustainable investing, emphasising its commitment to environmental, social, and governance (ESG) principles. However, recent regulatory actions have raised concerns about the authenticity of these claims.
In November 2022, the U.S. Securities and Exchange Commission (SEC) charged GSAM with failures in policies and procedures relating to two mutual funds and one separately managed account strategy marketed as ESG investments. To settle the charges, GSAM agreed to pay a $4 million penalty.
The SEC’s order found that, from April 2017 until February 2020, GSAM had several failures in policies and procedures regarding the ESG research its investment teams used to select and monitor securities. Specifically:
- Goldman Sachs International Equity ESG Fund: Launched on 28 February 2018, this fund was found to lack written policies and procedures for ESG research from its inception until June 2018. Even after establishing such policies, GSAM failed to consistently follow them before February 2020.
- Goldman Sachs Emerging Markets Equity ESG Fund: Launched on 31 May 2018, this fund faced similar issues concerning the absence and inconsistent application of ESG research policies and procedures.
- US Equity ESG Strategy: A separately managed account strategy that also suffered from the same deficiencies in ESG research policies and procedures during the specified period.
At Claim My Loss, we believe that if a firm markets its funds as sustainable, it has a duty to ensure that these claims are accurate and substantiated. Investors often accept higher fees and potentially lower returns to support ethical investments. If these funds fail to meet regulatory expectations, fund managers owe it to their clients to justify their sustainability credentials.
Why Should Investors Be Concerned?
- Transparency Issues: The SEC’s findings suggest that GSAM may have provided misleading information about its ESG investment processes, raising questions about the firm’s transparency.
- Potential Greenwashing: Misstatements about ESG practices could indicate greenwashing, where firms exaggerate or misrepresent their sustainability efforts to attract investors.
- Accountability to Investors: Investors who believed they were supporting sustainable goals may feel misled if their investments fail to align with these promises.
- Underwhelming Returns: If you accepted lower returns in good faith, believing your investment supported sustainable practices, you may feel that GSAM has a duty to justify its approach.
Have Goldman Sachs Asset Management’s Funds Changed?
Following the SEC’s action, GSAM has faced increased scrutiny over its ESG practices. While the firm has not publicly announced any rebranding or renaming of its funds, the regulatory actions have prompted a reassessment of its sustainability claims. Investors should remain informed about these developments and seek clarity on the genuine sustainability of these funds.
Your Rights as an Investor
If you invested in GSAM’s funds and believe the firm’s sustainability claims were misleading, you may have grounds for a claim. Key legal grounds include:
- Misrepresentation: If GSAM marketed funds as sustainable without substantiating these claims, this could fall under the Misrepresentation Act 1967.
- Breach of Contract: If fund documentation promised ESG compliance or sustainability metrics that were not delivered, this could constitute a breach of contract.
- Financial Losses: Many investors choose sustainable funds with the expectation of meaningful contributions to ESG goals. If these expectations were not met, you may have experienced financial and ethical losses.
How Claim My Loss Can Help
- Expertise: We specialise in mis-sold financial products and investment claims.
- Personalised Support: Our team provides tailored guidance throughout your claim.
- No Win, No Fee: You won’t pay us unless we win your case.
Start Your Claim Today
If you’ve invested with Goldman Sachs Asset Management and believe they have a duty to disclose their sustainability standards, don’t hesitate to act. Contact Claim My Loss today for a free consultation and take the first step towards reclaiming what’s rightfully yours.
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