U.S. markets regulator creates task force to target climate, ESG fraud

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission has formed an enforcement task force to examine misconduct related to environmental, social and governance issues as the regulator ramps up a focus on climate and other hot-button topics.

The SEC has deployed a 22-person team that will focus on disclosures from public companies related to issues such as climate change, investment-advisor activities and funds dedicated to ESG investments, the agency said on Thursday.

This is the latest in a series of SEC initiatives in recent weeks under President Joe Biden, who has made climate a key focus of his administration. The agency has also launched an effort to update guidance for public companies on how they share information with investors on climate risk and made the topic a priority for 2021 examinations.

The team’s “broad array of experience and expertise will allow us to better police the market, pursue misconduct and protect investors,” Kelly L. Gibson, acting deputy director of SEC’s enforcement division and head of the task force, said in a statement announcing the move.

Rooting out disclosure-related fraud is considered “bread and butter” work for the SEC, but climate-related disclosures have not been a central focus.

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