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In late 2020, rumor had it that the Securities and Exchange
Commission (SEC) under the Biden Administration would likely move
to encourage or require more robust disclosure of
environmental-social-governance (ESG) and climate-related risks.
1
Therefore, it came as no surprise when the Acting Chair of the
Securities and Exchange Commission (SEC), Allison Herren Lee,
released a statement on February 24, 2021, directing the SEC s
Division of Corporate Finance to focus on climate-related
disclosure in public company filings.
2 Although the statement did not
apply to the municipal bond market, we have observed that the
A series of recent announcements by the SEC underscores the agency’s commitment and allocation of resources to its heightened focus on environmental, social and governance (“ESG”).
Background
This year, the SEC has established its focus on disclosure and compliance issues related to environmental, social, and governance (ESG) matters. Recent developments by the SEC concerning ESG issues signal that this will be a significant enforcement priority this year and beyond.
First, on February 1, the SEC named Satyam Khanna as its inaugural senior policy advisor for ESG matters. In this new position, Khanna will advise the SEC on a wide range of ESG issues, including potential new regulations and initiatives. Currently a resident fellow at NYU School of Law, Khanna is no stranger to the SEC. He previously served as counsel to former SEC Commissioner Robert J. Jackson, Jr., and on the SEC’s Investor Advisory Committee. Khanna’s new role is part of the office of Acting SEC Chair Allison Herren Lee, who has been a vocal advocate for more standardized disclosures for investors on ESG issues. In her announcement of Khanna’s new position, Acting Chair Lee stated that
Monday, March 8, 2021
A series of recent announcements by the SEC underscores the agency’s commitment and allocation of resources to its heightened focus on environmental, social and governance (“ESG”) issues. Significantly, on March 4, 2021, the SEC announced the creation of a Climate and ESG Task Force in the Division of Enforcement.
1 As discussed in a prior alert, companies should be prepared for greater scrutiny of their disclosures concerning ESG, as well as related litigation, and these recent developments reinforce that analysis.
The Climate and ESG Task Force, led by Kelly L. Gibson, the SEC’s Acting Deputy Director of Enforcement, will focus on identifying “material gaps or misstatements in issuers’ disclosures of climate risks under existing rules,” examining “disclosure and compliance issues related to investment advisers’ and funds’ ESG strategies,” and evaluating whistleblower complaints related to ESG issues. Acti
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