March 4, 2021

SEC looks increasingly to ESG compliance and enforcement

The US Securities and Exchange Commission has established a Climate and ESG Task Force within the SEC’s Division of Enforcement.  The Task Force will focus on identifying misstatements by issuers in their disclosures about climate risk, and analyzing disclosure and compliance issues in the ESG strategies of investment funds and investment advisers.  The Task force will also pursue tips and whistleblower complaints on ESG issues, and serve as a clearinghouse for ESG-related matters for other SEC divisions and offices.  The Task Force will be headed by the Acting Deputy Director of Enforcement, and will be comprised of 22 individuals from various areas of the agency.

The SEC also recently created a new position, that of Senior Policy Advisor for Climate and ESG, and appointed a former member of the SEC’s Investor Advisory Committee to the position.  Consistent with these measures, the SEC’s Division of Examinations has announced that climate and ESG-related risks will be a major focus of examinations in 2021.

For a deeper understanding of ESG risks and enforcement trends, see our CLE entitled “Enforcement and Litigation Risks Arising from ESG Disclosures,” presented by Willkie partners William Stellmach and Todd Cosenza.

SEC press release | 2021 Examination  Priorities