What: Allbirds dropped ‘sustainable’ claim from IPO after the SEC objected.

Why it is important: The move by the SEC highlights how regulators are paying increasing attention to how companies report on climate- and sustainability-related issues.

In August, Allbirds announced that it would pursue a ‘sustainable public equity offering’ that would guarantee the company met various environmental, sustainability and governance standards. However, it repeatedly weakened the proposals in subsequent updates to its IPO prospectus.

In September it removed references to a sustainable “offering” and said it would instead follow a “sustainability principles and objectives” framework. In October it then removed half the references to the new framework, including suggestions that it could increase the cost of the IPO and that other companies could follow its “sustainable” approach.

Although the company has made eco-friendliness a key part of the branding for its wool- and eucalyptus-based shoes, they feel that existing ESG ratings are biased to companies with longer track records. Allbirds claims that the carbon impact of each pair is 30 per cent less than that of its rivals, though it has faced criticism from some activists over the way it calculates emissions.

Allbirds dropped ‘sustainable’ claim from IPO after SEC objection