A popular environment, social and governance (ESG) fund in Japan managed by Morgan Stanley and sold by Mizuho Financial Group Inc. is triggering an industry-wide review by regulators who are looking into new rules for mutual funds to protect investors from possible “greenwashing.”

The Financial Services Agency may start discussions with asset management firms and fund distributors by June about whether there should be rules for mutual fund labels, according to FSA officials who spoke on condition they not be identified. One of the goals is to prevent firms from exaggerating or misrepresenting the environmental, social or governance benefits of their funds to attract investors, the people said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.