The SEC established a new Climate and Environmental, Social and Governance ("ESG") Task Force within the Division of Enforcement.

The SEC explained that the task force will initially focus on identifying material omissions or misstatements in issuer disclosures relating to climate risks under existing regulations. Additionally, the SEC stated that the task force will:

  • establish initiatives to "proactively identify ESG-related misconduct";
  • use Division of Enforcement resources, including data analysis, to mine and evaluate information across SEC registrants to detect potential violations; and
  • review and assess tips, referrals and whistleblower complaints concerning ESG issues.

In a joint statement, SEC Commissioners Hester M. Peirce and Elad L. Roisman questioned the novelty of the SEC's recent announcements on climate-related measures, including (i) SEC Acting Chair Allison Herren Lee's announcement (see coverage) regarding the update of staff guidance and (ii) the Division of Examinations' announcement of its 2021 Examination Priorities (see  related coverage).

The Commissioners expressed their view that these new initiatives are "simply a continuation" of existing efforts and do not present new assessments of public filers' disclosures. Furthermore, the Commissioners stated, it would have been prudent to evaluate the results of the Division of Corporation Finance and Division of Examination staffs' most recent ESG-related findings prior to allocating resources to an enforcement initiative dedicated solely to ESG issues.


Any enforcement action should be preceded by the adoption of very clear laws and rules governing the purported misconduct. With respect to the focus of the new Task Force, what are they? Further, the establishment of a special Task Force suggests that enforcement on purported environmental disclosure failures is a pervasive problem and as a result, a priority. Where is the evidence of that?

Hopefully, this Task Force does not result in the SEC attempting to "adopt" ESG disclosure requirements by bringing, and then settling, enforcement actions. That is most definitely not the way that rules should be made. 

Primary Sources

  1. SEC Press Release: SEC Announces Enforcement Task Force Focused on Climate and ESG Issues
  2. SEC Statement, Commissioners Hester M. Peirce and Elad L. Roisman: Enhancing Focus on the SEC's Enhanced Climate Change Efforts

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