With two quick moves in late February and early March 2021, the Securities and Exchange Commission (“SEC”) has focused the attention of public companies on their climate-related and environmental, social and governance (“ESG”) disclosures. In late February, Acting Chair, Allison Herren Lee issued a statement directing the staff of the Division of Corporation Finance to review how public companies are addressing the topics identified in the 2010 Commission Guidance Regarding Disclosure Related to Climate Change while engaging with public companies on climate issues. She instructed the staff to analyze how companies are currently managing climate-related risks. Acting Chair Lee emphasized that these steps will help the SEC ensure compliance with the Commission’s existing rules while guiding the SEC to develop a more comprehensive framework that produces consistent, comparable, and reliable climate-related disclosure.

Next, in early March, the SEC announced its creation of a Climate and ESG Task Force in the Division of Enforcement. The task force will initially focus on material gaps or misstatements in public company disclosure of climate risks under the Commission’s existing rules and work closely with the Divisions of Corporation Finance, Investment Management and Examinations to highlight climate and ESG-related risks for investors.

These actions, early in the Biden administration, ahead of the expected confirmation of Gary Gensler as SEC Chair, send a strong signal that public companies should reexamine the 2010 climate guidance and ESG messaging and enhance their disclosure, if necessary, to address the SEC’s close focus in these areas. Please reach out to a member of HSE’s Securities and Capital Markets team for the latest insights and industry response to these developments.


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