The question of where the SEC stands on ESG has been difficult to answer. Back in September, the SEC quietly dissolved their ESG taskforce, leaving many to wonder if ESG enforcement was no longer a priority at the agency. Despite the taskforce’s dissolution, more ESG enforcement has come out of the SEC, including a recent enforcement action against Keurig for making misleading recycling claims and a major settlement with Invesco for making misleading statements about their ESG funds. Some believe that ESG is alive and well at the SEC, with a recent Crowell memo stating:
“This action indicates that even though the SEC dissolved its ESG Task Force, it will not hesitate to bring enforcement actions when it believes there have been ESG-related misstatements. As such, companies should continue to assess their material ESG-related statements for risk, just as they would any other material statements.”
The big question is, what does the incoming administration mean for SEC enforcement priorities? Clearly, ESG enforcement lives on for now, but come January will that change? We have reason to believe that it may not. Though many Republicans express staunch opposition to ESG, some want to combat it by arguing that company ESG claims are misleading to consumers and other stakeholders. Earlier this year, the Attorneys General of Iowa, Kansas, Nebraska, and Tennessee sent letters to the CEOs of Target, Tyson Foods, and Ahold Delhaize USA warning them that their climate statements may be considered misleading. This puts red-state AGs in the position of greenwashing enforcers, although their proposed remedy is for the companies to drop ESG altogether. This is an example of how the incoming administration may opt to turn up the heat by using the SEC to enforce against greenwashing. It is ironic that we may see the same means as the pro-ESG side of the aisle, but to different ends.
Our members can learn more about anti-ESG here.
If you aren’t already subscribed to our complimentary ESG blog, sign up here for daily updates delivered right to you.
