Mintz informed of pending SEC investigations (reported by Reuters) of allegedly potentially inconsistent ESG-related communications and disclosures being made to Texas state regulators and investors by banks doing business with the state, which passed laws last year that banned state entities from working with companies that effectively “discriminate” against the fossil fuel or firearms industries. Based on the report, the SEC is focused on alleged inconsistencies between the banks’ communications about their policies on doing business with fossil fuel and firearms companies to state regulators vs. investors, which may have diametrically opposing views on these topics.
The firm notes:
Although this enforcement activity is perhaps not the precise type that was anticipated when the SEC announced a focus on ESG issues--as both companies and the private bar thought that SEC enforcement actions would be directed against failures to comply with ESG disclosure standards articulated by the SEC--this type of enforcement activity, centering on potential inconsistencies between information disclosed to different types of recipients, is squarely within the SEC's remit.
We previously reported on the SEC’s launch in March 2021 of a Climate and ESG Task Force within the Division of Enforcement.
See our recent report: “ESG Enforcement.”
This post first appeared in the weekly Society Alert!