The Vale action was the first brought by the SEC’s 22-person Climate and ESG Task Force, which continues to bring additional enforcement actions for ESG-related disclosure issues. The SEC’s current focus on ESG-related disclosures likely will lead to more ESG-related enforcement actions.
The Vale action illustrates the types of ESG-related disclosure cases the SEC may bring under the existing disclosure framework. The SEC’s actions demonstrate a view that ESG-related disclosures are material and that misrepresentations or omissions related to such disclosures broadly will be closely scrutinized and considered actionable. Public companies may garner even more scrutiny when they are affected by adverse events that have any connection to their ESG-related disclosures. In addition, the Vale action demonstrates that the SEC’s scrutiny is likely to extend beyond periodic filings and into other ESG-related disclosures, such as those in sustainability reports or other climate-related analyses. This is equally true for foreign issuers that access U.S. capital markets for equity or debt investments.
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