SEC won't charge climate group but warns investors on disclosure

The U.S. Securities and Exchange Commission (SEC) has concluded an investigation into the climate group Climate Action 100+ and will not pursue charges against it. The investigation stemmed from the group's actions during a May 2021 shareholder meeting of ExxonMobil.

Despite the decision not to press charges, the SEC issued a warning, expressing concerns about the group's activities. The agency emphasized that large shareholders must understand their regulatory disclosure obligations, particularly in anticipation of the 2027 proxy season.

The 2021 ExxonMobil shareholder meeting was a significant event in the ongoing debate about the extent to which investors and corporations should consider non-traditional factors, such as climate change, in their decision-making. At that meeting, major investment firms including BlackRock, Vanguard, and State Street supported some directors proposed by activist hedge fund Engine No. 1. These directors argued that ExxonMobil needed to increase its focus on the energy transition.

In recent times, various Republican politicians, often representing energy-producing states, have voiced strong criticism of asset managers regarding their environmental and social stances, suggesting such focus could potentially violate antitrust laws. Neither Climate Action 100+ nor ExxonMobil immediately responded to requests for comment.