ARTICLE • 5 min

SEC Task Force and Tumultuous 2022 Reveal Legislative and Executive Concerns on ESG

2022 was a tumultuous year for environmental, social, and governance (ESG) issues. The year was marked by extreme weather events, increasing investor pressure, and rising regulatory scrutiny. ESG and sustainability issues were thrust into the spotlight, and their importance became more pressing than ever before.

The US Securities and Exchange Commission (SEC) established the Climate and ESG Task Force in March 2021 to examine and address issues related to climate change and ESG disclosures. The task force has since brought multiple enforcement actions against companies for inadequate ESG disclosure or misleading claims of ESG practices.

CEOs should be wary of the increased focus on ESG disclosure, as the SEC and other regulators are continuing to monitor ESG-related claims and disclosures. Failure to comply with ESG-related regulations can result in significant legal and reputational risks for companies.

In addition, the future of ESG regulation in the US remains uncertain. The Build Back Better Act, which includes several provisions related to ESG and climate change, was passed by the House of Representatives in November 2021, but it has yet to be approved by the Senate. The act would require public companies to disclose climate-related risks and greenhouse gas emissions, among other provisions.

Outside of the US, other countries are also ramping up their ESG-related regulations. The European Union recently passed new regulations to strengthen its Sustainable Finance Disclosure Regulation, and China has announced new rules to require listed companies to disclose ESG information.

The increased regulatory and investor focus on ESG issues reflects a growing recognition of the importance of sustainability and ESG practices for companies' long-term success.

According to the Harvard Business Review, "ESG issues will continue to grow in importance, as investors, consumers, and other stakeholders demand greater accountability and transparency from companies."

In conclusion, the SEC task force and the events of 2022 reveal that ESG is a critical concern for both legislative and executive bodies. CEOs should take note of the increased focus on ESG and ensure that their companies are complying with regulations and providing accurate ESG disclosures.

Over 90 public companies and 70 non-profit organizations use Socialsuite for tracking and reporting on their impact. With the help of our ESG software and expert team, businesses can easily get started on impact reporting, disclose faster, and save money compared to traditional methods. Whether you're new to impact reporting or looking to enhance your current practices, Socialsuite offers the tools and expertise needed to achieve your sustainability goals. Contact us to learn more about our solutions.

Brad Gurrie
Chief Executive Officer
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