The US Securities and Exchange Commission wants to tighten the rules for investment funds that are marketed as sustainable.
On Wednesday, the authority presented drafts for a reform of the heavily criticized ESG investment category.
ESG is the abbreviation for Environmental, Social and Governance.
The financial sector offers investment products under this label, in which criteria such as the environment, social issues and good corporate governance are to be given greater consideration.
The asset class has seen strong growth in recent years.
However, experts have long complained that this market is not regulated enough.
They call for clearer and uniform definitions and regulations.
The SEC now wants to comply with this and ensure that financial products that have ESG on them actually follow this approach.
For example, when naming investment funds, it should be ensured that they commit themselves to specific investment strategies and not just use them for marketing purposes.
So far, the SEC's draft rules are just proposals.