The Securities and Exchange Commission has quietly made it much more difficult for activist investors to challenge how corporations manage climate risk and other politically charged issues.
In a little-noticed change to regulatory guidance last week, the SEC said it now would oppose the publication of investor-to-investor communications known as exempt solicitations unless they are filed by shareholders who control at least $5 million of that company’s stock.
Exempt solicitations are published on SEC’s EDGAR corporate disclosures platform and are often used by activists to make the case for companies to reconsider their approach to matters such as climate change, workplace diversity and organized labor.
The agency previously had said “staff will not object” to exempt solicitations from investors with modest holdings in a company. But last Friday, the SEC struck out that language because it said the filings had been used primarily to “generate publicity,” which it said was not the intended purpose of the process.
