The U.S. Securities and Exchange Commission (SEC) announced today the creation of a new Climate and ESG Task Force in the Division of Enforcement. The new task force will develop initiatives to proactively identify ESG-related misconduct, with an initial focus on identifying material gaps or misstatements in issuers’ disclosure of climate risks. The task force will also analyze disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies.
In addition, the task force will evaluate and pursue tips, referrals, and whistleblower complaints on ESG-related issues, and provide expertise and insight to teams working on ESG-related matters across the Division.
The creation of the Climate and ESG Task Force marks the latest step in a renewed focus on ESG and sustainability at the SEC. Last week, the SEC announced a review of its guidance for public company obligations for disclosures related to climate change risk, and earlier this year, the commission created a new senior role, with responsibility for advising and overseeing on climate risk and ESG issues, naming Satyam Khanna as Senior Policy Advisor for Climate and ESG.
Acting SEC Chair Allison Herren Lee, said:
“Climate risks and sustainability are critical issues for the investing public and our capital markets. The task force announced today will play an important role in enhancing and coordinating the efforts of the Division of Enforcement, the Office of the Whistleblower, and other parts of the agency to bolster the efforts of the Commission as a whole on these vital matters.”
The Climate and ESG Task Force will be led by Kelly L. Gibson, Acting Deputy Director of Enforcement, who will oversee a Division-wide effort, with 22 members drawn from the SEC’s headquarters, regional offices, and Enforcement specialized units. According to the SEC, the task force will coordinate the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations.
“Proactively addressing emerging disclosure gaps that threaten investors and the market has always been core to the SEC’s mission. This task force brings together a broad array of experience and expertise, which will allow us to better police the market, pursue misconduct, and protect investors.”