New SEC unit will tackle misconduct involving ESG

Amid growing investor demand for disclosure about ESG issues generally, and climate-related risks specifically, the U.S. Securities and Exchange Commission (SEC) is launching a task force to target ESG-related misconduct.

The SEC has announced the creation of a new unit within its enforcement division to address compliance involving ESG issues, starting with issuers’ climate risk disclosure. The group will also examine possible issues stemming from the ESG strategies employed by investment funds and firms.

“Proactively addressing emerging disclosure gaps that threaten investors and the market has always been core to the SEC’s mission,” said acting deputy director of enforcement, Kelly Gibson, who will lead the 22-person unit.

“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,” Gibson said in a release.

The new Climate and ESG Task Force will also pursue whistleblower tips and complaints on ESG-related issues.

“Climate risks and sustainability are critical issues for the investing public and our capital markets,” said acting chair of the SEC, Allison Herren Lee, in the release.

“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,” she noted.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.