Authorities are investigating the improper storage of human remains at a southern Colorado funeral home that performs “green” burials without embalming chemicals or metal caskets.

The investigation centres on a building owned by the Return to Nature Funeral Home outside Colorado Springs in the small town of Penrose.

Deputies were called to the single-story building on Tuesday night in reference to a suspicious incident.

Investigators returned the next day with a search warrant and found the improperly stored remains, the Fremont County Sheriff’s Office said.

The number of human remains found and their condition were not specified.

The sheriff’s office said it was working with state and federal officials on the investigation.

Family members who used the funeral home were asked to contact the sheriff’s office.

More details were expected to be released by officials at a scheduled news conference Friday morning.

Trash bags could be seen on Thursday outside the entrance of the company’s building, with two law enforcement vehicles parked in front. Yellow police tape cordoned off the area and a putrid odour pervaded the air.

Under Colorado law, green burials are legal but state code requires that any body not buried within 24 hours must be properly refrigerated.

Joyce Pavetti, 73, can see the funeral home from the stoop of her house and said she caught whiffs of a putrid smell in the last few weeks.

“We just assumed it was a dead animal,” she said. On Wednesday night, Ms Pavetti said she could see lights from law enforcement swarming around the building and knew something was going on.

Neighbour Ron Alexander thought the smell was coming from a septic tank.

The Return to Nature Funeral Home provides burial of non-embalmed bodies in biodegradable caskets, shrouds or “nothing at all”, according to its website.

The company also provides cremation services. Messages left for the Colorado Springs-based company were not immediately returned.