SEC Commissioner Clarifies Scope of SEC Risk Alert re: ESG

SEC Commissioner Peirce, one of the two Republican commissioners at the SEC, recently issued a statement interpreting and clarifying the scope of the SEC Risk Alert concerning ESG disclosures that was issued a few days ago.  Specifically, Commissioner Peirce placed this risk alert within the broader SEC focus on "looking for [] consistency between claims and practice," and stated that the SEC would not be "merit regulators" in the ESG space, noting that "[t]he SEC's role is not to assess whether any particular strategy is a good one."

This is the third time in recent months that the SEC's Republican commissioners have issued a statement that involved aspects of dissent from the SEC's recent ESG focus.  (See An Honest Conversation about ESG Regulation ,  Enhanced Focus on the SEC's Enhanced Climate Change Efforts, and Republican SEC Commissioner Questions SEC Focus on Climate Disclosures .)  This suggests that there may be significant pushback from the Republican minority in the SEC concerning the extent of the ESG disclosures that the SEC is currently contemplating, which may limit the extent of these disclosures and/or the associated enforcement activity.  At the very least, it is noteworthy that the Republican SEC commissioners are publicly highlighting that the SEC's role in addressing ESG issues is contested.