Regulatory Updates
The Securities & Exchange Commission has disbanded its Climate & ESG Task Force, which had been launched with great fanfare in March 2021 at the beginning of the Biden administration. However, the Climate & ESG Task Force had initiated relatively few enforcement actions over the past three-and-a-half years — although it had pursued a number of high-profile actions against a wide range of entities, including asset managers and mining companies. Additionally, the SEC had pursued enforcement actions focused on ESG-related activities — e.g., greenwashing — without involving this task force. So, even though the disbandment of the Climate & ESG Task Force signals a relative de-prioritization of ESG enforcement, the practical impact of this administrative action may prove minor.
The California Legislature has rejected Governor Newsom's proposal that California delay the implementation of its recently enacted climate disclosure laws for two years. Instead, the California Legislature passed S.B. 219, which would, among other things, provide the state agency in charge of enacting the disclosure regulation with an additional six months to adopt the regulations but not extend the deadline for companies to comply. As of September 24, Governor Newsom has not yet signed this legislation. (It should also be noted that the California climate disclosure laws at issue are being challenged in the courts, and it is not yet clear whether these laws will survive the process of judicial review.)
Litigation Updates
Recent greenwashing litigation — by both private plaintiffs and the SEC — has focused on the consumer products sector. Specifically, within the past few weeks, a private plaintiff brought a consumer protection lawsuit against Tyson Foods alleging misrepresentations concerning the marketing of "climate-smart" beef, and the SEC filed an enforcement action against the manufacturer of coffee machines concerning statements about the recyclability of coffee pods. Both actions focused on allegedly misleading advertising concerning environmental issues and the potential impact on consumers. These legal actions demonstrate the continuing focus on consumer products in greenwashing litigation and suggest that further lawsuits or enforcement actions may be filed against similarly situated companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
