SEC announces formation of Climate & ESG Task Force

Helee Lev, Goby's CRO, discusses the recent announcement by the SEC about the formation of a Climate & ESG Task Force within their Division of Enforcement.

Video transcript:

There's been a lot of talk this year about how greenwashing is not going to last into 2021. Things like a PowerPoint deck and a firm-wide policy that doesn't have actual tentacles and meaning and go deep into the actual investments themselves to collect data and drive action is not going to work.

In line with this, the SEC just announced that they are creating a division for a Climate and ESG Task Force. It has 22 members, so no small thing, and the point of this new task force is to examine advisors to make sure that they are not making misstatements to clients.

Now, when we say misstatements, think that does in a lot of cases referred to the greenwashing. No one is intentionally trying to deceive in theory. But oftentimes you make these claims, or you make these statements, or you have a firm-wide policy that's just sitting at the firm as a policy and not actually being implemented or actionable into your investments.

This task force is going to actually drive the governance necessary to make sure that investment managers are doing what they say that they're doing and enforce it and potentially take action against these firms that are making the statements or are greenwashing.

They're also going to look to propose new rules and regulations around standardized disclosures, which will be great to help firm things up for this industry.

In addition, I thought it was interesting that they will have a whistleblower line. So if there is a tip or a complaint with regards to an ESG-related issue, there's now a channel to present that to this new SEC Climate and ESG Task Force.

More to come in this space, no doubt, but this is an exciting movement, for sure.