SEC Disbands Climate and ESG Enforcement Task Force Amid Industry Pushback and Legal Challenges

The Securities and Exchange Commission (SEC) has reportedly disbanded its Climate and ESG Enforcement Task Force, which was a key part of SEC Chair Gary Gensler’s initiative to improve investor access to environmental, social, and governance (ESG) data from public companies and registered investment firms. The Task Force’s dissolution follows three years of industry pushback and mixed legal outcomes. Before its closure, the SEC had already excluded ESG from its annual Examination Priorities Report, which outlines the primary focus areas for SEC reviews. Despite the Task Force being dissolved, the SEC continues to move forward with several of its proposed rules related to ESG and climate.

Established in March 2021 under Acting Chair Allison Herren Lee, the Task Force was created to “develop initiatives to proactively identify ESG-related misconduct.” As part of Gensler’s emphasis on climate and ESG issues, the Task Force initially comprised more than two dozen SEC staff members. It worked to uncover material misstatements or omissions under existing SEC rules, targeting various market participants for misleading public disclosures or failure to implement their stated ESG policies. Despite some notable achievements, the Task Force’s disbandment highlights the broader challenges facing the SEC’s ESG efforts.