We blogged recently that shoe company Allbirds had ambitions to be the first “sustainable IPO.”

The IPO was a financial success, raising $303 million at a valuation of $4.1 billion on November 3rd. But news emerged that SEC comments and environmental critiques of the company’s sustainability claims led the shoemaker to scale back those claims even further than it had already done in October.

The final prospectus is here – “ESG” is mentioned 89 times (down from October) and “SPO Framework” is found 33 times (the same as in early October). As my colleague John Jenkins pointed out, this is not the first time this type of thing has happened. He says the SEC used to scrutinize subjective claims in IPO filings pretty closely, and this kind of comment letter back & forth was pretty common. While that may have abated for “unicorn IPOs” in recent years, the SEC is now signaling that it will scrutinize ESG claims. Allbirds’ experience – while no doubt highly fact-specific – is an example of how that scrutiny can play out in raising capital.

With SEC looking at a number of ESG-oriented matters at the moment – including whether ESG investments are operating in the way they claim – it is likely we will see more of this in the future.

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