Guest Post By: Tim Mohin
The SEC’s beleaguered ESG agenda took another hit this week as their Enforcement Division’s Climate & ESG Task Force, set up three years ago, was quietly disbanded.
The group was created in March 2021 to “develop initiatives to proactively identify ESG-related misconduct.” Since then, the group has played a pivotal role in some of the SEC’s biggest ESG-related fines, like their biggest ones against Deutsche Bank ($25 million) and Goldman Sachs ($4 million) and for misleading ESG fund claims. The SEC now claims that “the expertise developed by the task force now resides across the Division.”
This move is another signal of SEC’s gradual retreat from its ESG agenda as scrutiny and lawsuits grow from the conservative-led ESG backlash. ESG was removed from the SEC’s list of 2024 policy priorities after featuring as a priority every year from 2020 – 2023. And just last week, we shared how SEC Chair Gary Gensler’s ESG proposals have been stalled as the election – and possibly the end of his tenure – draws near.
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As if to show that the SEC still has some ESG “teeth,” last week, the SEC fined Keurig Dr Pepper $1.5 million for misleading claims. They said in their 2019 and 2020 annual reports that their coffee pods could be recycled, but recycling companies said they would not accept them. John Dugan of the SEC said, “Public companies must ensure that the reports they file with the SEC are complete and accurate. When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”
Although the importance of ESG has been diminished for now, Dugan’s comments speak to why the SEC will always return to these issues – it’s information investors need to make better decisions.
Related Article: Guest Post: Investors Rally Behind SEC Climate Rule – Tim Mohin
