The U.S. Securities and Exchange Commission (SEC) sued Brazilian mining company Vale for allegedly “making false and misleading claims about the safety of its dams” leading up to the January 2019 collapse of the Brumadinho dam (SEC). The collapse killed 270 people, released close to 12 million cubic tons of mining waste, and caused incalculable social and environmental damage. Vale has since spent billions on compensation and safety improvements, and has lost more than $4 billion in market capitalization.

According to the SEC, Vale, one of the largest iron ore producers globally, manipulated dam safety audits, received fraudulent stability declarations from February 2016 to October 2018, and misled “local governments, communities, and investors about the safety of the Brumadinho dam through its environmental, social, and governance (ESG) disclosures” (SEC). Further, the SEC alleged that Vale knew for years that the dam did not meet international standards for dam safety, despite claiming to investors that the dam met those standards. The SEC’s complaint is seeking “civil penalties, ill-gotten gains plus interest” (Bloomberg).

Since the Biden Administration took office, the SEC has put an increased emphasis on ESG disclosures. In 2021, it created a task force within the Enforcement Division to focus on the issue, and has pledged to investigate public companies that might be exaggerating their ESG credentials (Reuters).