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Climate Change Risk and Disclosure: A New Focus for SEC Enforcement

By Jacqueline C. Wolff
June 01, 2022

At a time when climate change has been referred to by the President of the United States as our "existential crisis," and investors are pouring trillions of dollars into green, sustainable funds, more and more companies and investment funds are touting their climate and environmental bona fides. In April of this year, Mastercard announced that it was going to link all employee bonuses to meeting ESG (environmental, social and governance) goals. See, "Mastercard (MA) to Tie All Employee Bonuses to Meeting ESG Goals," Bloomberg (April 19, 2022). Similarly, in March of this year, Goldman Sachs announced that directors at companies in which Goldman invests who fail to provide sufficient climate risk disclosure are at risk of being voted out by Goldman.

These are important and laudable steps. But as evidenced by the SEC's recent activities and announcements, doing well while doing good carries with it some risks.

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