Businesses in financial services and other sectors could find themselves in the crosshairs of so-called greenwashing allegations as the regulatory focus on environmental, social and governance-related disclosures intensifies.

Heightened enforcement activity includes recent charges brought by the U.S. Securities and Exchange Commission against the investment management arm of BNY Mellon for alleged misstatements and omissions concerning its ESG funds. BNY Mellon Investment Advisor Inc. agreed in late May to pay a $1.5 million penalty to settle the SEC charges.

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In terms of insurance coverage, the obvious target would be D&O policies, said Dennis Artese, shareholder at Anderson Kill in New York.

“We expect to see certain hurdles but in many of these greenwashing cases it will be covered and at a minimum will be defended,” Mr. Artese said.

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