The Securities and Exchange Commission (SEC) in the US has launched an investigation into Goldman Sachs’ funds offering investments using environmental, social and governance (ESG) criteria, reported Bloomberg News.

The probe focuses on the bank’s mutual-funds business operated by its asset-management arm, according to people familiar with the matter.

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According to the sources, the investigation is tied to two funds and the agency is probing whether some investments for the funds violate the ESG metrics promised in marketing materials.

The spokespersons for Goldman Sachs and SEC did not comment on the news.

The news comes as the European and US authorities strengthen their scrutiny of investment companies amid increasing allegations of disclosure lapses and overstating ESG capabilities.

Recently, Deutsche Bank and its asset management division DWS had their Frankfurt offices searched by German federal police in connection with a greenwashing probe.

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The SEC currently have no rules in connection to ESG requirements. Hence, the probe is expected to focus on whether or not Goldman’s disclosures to clients accurately described the bank’s investment practices.

The agency has been urging fund managers not to mislead investors about the standards and methods they use for classifying funds as ESG.

Last year, the FCA set up a task force of enforcement lawyers with a focus on ESG disclosures. The regulator also published a report which showed that several funds describing themselves as ESG were not making enough efforts to justify their marketing criteria.