Below is a brief look at some recent environmental enforcement activity. For more information about compliance related topics, see our Environmental Compliance Tips page.
ESG Fund Management Firm Fined – SEC Disbands Task Force
The Securities and Exchange Commission (SEC) charged WisdomTree Asset Management Inc. with making misstatements and for compliance failures relating to how it managed funds that were marketed as incorporating environmental, social, and governance (ESG) factors.
According to the SEC, from March 2020 until November 2022, WisdomTree invested in companies involved in fossil fuels and tobacco in three of their ESG Exchange Traded Funds. This is contrary to guidance in the funds’ prospectuses (Source: WealthManagement.com).
Without admitting or denying the SEC’s findings, WisdomTree agreed to a cease-and-desist order, as well as censure, and agreed to pay a $4 million civil penalty.
The SEC disbanded their ESG taskforce but not before an enforcement action against an ESG mutual fund (Image by Sergei Tokmakov, Esq).
In a blog by Mintz, they state, “While this may appear to be nothing more than a garden-variety case of a prosecution based upon false statements in marketing materials, this action is nonetheless significant. This case constitutes an example of an ESG-based prosecution–despite the recent disbandment of the SEC’s Climate and ESG Task Force–and so indicates a continued focus on ESG-related issues at the SEC.”
SEC Disbands Climate and ESG Enforcement Task Force
It was reported in September by Bloomberg Law that, “The SEC has quietly disbanded a group of enforcement lawyers who helped bring litigation fighting misleading environmental, social and governance disclosures for more than three years.”
As we previously reported, the SEC has come under fire by some from deviating from their core mission. One SEC Commissioner, Hester Peirce, was particularly vocal about the SEC’s focus on ESG saying, in part, “I am concerned that ESG standards, intentionally or not, drive private capital to uses that check the right officially sanctioned ESG box, not where it will best meet human needs and solve societal problems.”
Environmental Enforcement at Ohio Refinery
On September 27, 2024, the United States Department of Justice (DOJ) announced that Lima Refining Company “…must pay a civil penalty of $19 million and implement an estimated $150 million in capital investments, including control technology expected to reduce emissions of benzene by an estimated 4.34 tons per year…”
Benzene is a common industrial contaminant that is a known carcinogen.
The majority of the population is routinely exposed to low levels of benzene from a number of sources, including tobacco smoke, pumping gasoline, exhaust from motor vehicles, and industrial emissions. Benzene vapors can also be found in glues, paints, furniture wax, and detergents.
According to the DOJ, “This settlement is part of EPA’s (Environmental Protection Agency) and the Justice Department’s ongoing focus to assist communities that have been historically marginalized and disproportionately exposed to pollution.”
RCRA Violation
The EPA reached a settlement with Purac America, Inc., doing business as Corbion (Corbion), to resolve alleged violations of federal and state laws governing the handling and storage of hazardous waste at its facility in Tucker, Georgia.
Corbion manufactures resins for the medical and pharmaceutical industries. The production processes generate liquid hazardous waste. In March 2023, the EPA conducted a compliance evaluation inspection at the facility under the federal Resource Conservation and Recovery Act (RCRA). At the time of the inspection, the EPA observed “several potential violations” of the Georgia Hazardous Waste Management Act and its implementing regulations relating to the storage of hazardous waste in tanks and containers.
As part of this settlement, Corbion has agreed to implement a Supplemental Environmental Project (SEP) at the facility. The SEP aims to eliminate a pathway for precipitation to enter and mix with hazardous waste that is managed in Corbion’s hazardous waste tank system through construction of a roof over the hazardous waste tank system and a secondary containment area. The estimated cost of the SEP is $230,000.
In addition to performance of the SEP, the company has also agreed to pay a penalty totaling $332,000 and has certified that it has corrected all alleged noncompliance.
Source: USEPA
Environmental Advice
Dragun Corporation has been assisting the regulated community with environmental compliance, assessment/remediation, and litigation support since 1988. If you need assistance with an environmental issue, including litigation support, contact Jeffrey Bolin, M.S., CHMM, at 248-932-0228, Ext. 125.
Dragun Corporation does not use artificial intelligence in drafting our blogs or any other material.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for 45 years. He has written hundreds of blogs and articles. His published work includes Michigan Lawyers Weekly, Detroiter, Michigan Forward, GreenStone Partners, Manure Manager Magazine, Progressive Dairy, and HazMat Magazine.
Jeffrey Bolin, M.S., reviewed this blog. Jeff is a partner and senior scientist at Dragun Corporation. He is a published author, frequent speaker, and expert witness. His expertise in environmental due diligence, PFAS, vapor intrusion, and site assessments has led to projects in the US, Canada, and overseas. See Jeff’s Bio.
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