August 20, 2021

ESG Disclosures: Enforcement Actions on the Horizon?

Last fall, the SEC settled an enforcement action with Fiat-Chrysler that arose out of allegedly misleading disclosures about its compliance with emissions standards. There may be more actions like this on the horizon, according to a recent Cooley blog. Here’s an excerpt, based on a July speech by then-Acting Enforcement Director Melissa Hodgman:

According to Hodgman, we should “expect to see ‘other cases like that, where there was a misstatement or something that wasn’t disclosed to investors that they needed to know to make [an] investment decision.’” In addition, she observed “that ‘like many of the other areas, I don’t think this is a different approach to enforcement or applying anything in a different way,’ adding that ‘our securities laws were written to evolve and [meet] the new products and the new environments in which we find ourselves.’”

September is often the busiest month of the year for enforcement actions. With the new Director and the ongoing work of the Division’s “ESG task force,” it will be interesting to see what happens in the coming weeks.

Liz Dunshee