Reps. Budd, Norman Lead Coalition to Oppose SEC’s Destructive Climate Disclosure Rule

Washington, D.C. – Today, Rep. Ted Budd (R-NC) and Ralph Norman (R-SC) led a coalition of 40 House members to send a letter to the Securities and Exchange Commission urging them to table their proposed rule that would mandate that publicly traded companies disclose their climate-related risks, report greenhouse gas emissions, and report possible financial effects of climate change.

Rep. Budd said in a statement:

“The SEC’s proposed rule would hijack the true purpose of financial regulation to further a radical environmentalist agenda, represents a blatant regulatory overreach by unelected bureaucrats instead of the people’s representatives in Congress, and would undermine our ability to produce more energy right here in America. The SEC should immediately terminate this thinly-veiled attempt to impose Green New Deal mandates onto private sector job creators.”

Rep. Norman said in a statement:

“The SEC's proposed climate rule is bad for business, bad for investors, and is nothing more than climate activism cloaked in additional red tape. It's time for the Left to stop trying to shame companies into combatting climate change. I'll tell you how we effectively combat climate change: We utilize an all-of-the-above energy strategy that reduces costs, eliminates dependence on imports from foreign nations, and paves the way for the transition to renewables. More regulations on private citizens and businesses is not, and never will be, the answer.”

The full text of the letter is below:

We, the undersigned Members of Congress, have significant concerns with the Securities and Exchange Commission’s (SEC) proposed rule on “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This proposal would require publicly traded companies to disclose their climate-related risks, report greenhouse gas emissions, and report possible financial effects of climate change. We urge you to immediately table this rule.

Not only would this proposal add additional red tape and bureaucracy that would be extremely burdensome, if not impossible, for many public companies to fully comply with, but it would also far exceed the authority that Congress explicitly granted the SEC. The SEC cannot and should not mandate such public disclosures of information that strays from the “core purpose of disclosure, [which] is to provide investors with the information they need to make informed investment and voting decisions,” which “allow[s] our capital markets to flourish.” It is apparent that, as we have recently seen, this information would only be used to smear these companies.

This proposal would drastically disrupt the current disclosure regime. Current SEC disclosure mandates are intended to provide investors with insightful material information into a company’s performance. SEC Commissioner Peirce emphasized that this proposal, instead, would tell “corporate managers how regulators, doing the bidding of an array of non-investor stakeholders, expect them to run their companies.” This would force everyday investors to view companies through a tinted lens, obscured by the demands of vocal stakeholders “for whom a company’s climate reputation is of equal or greater importance than a company’s financial performance.” Ultimately, the SEC’s actions would act to undermine and shame public companies, not to provide investors with necessary financial disclosures.

Furthermore, at a time of global turmoil, when energy prices are at decade highs, how would this rule be beneficial to American citizens? Simply wrapping climate activism in financial regulation will only further exacerbate our current energy crisis and do nothing to help everyday Americans heat or cool their homes or lower prices at the gas pump. Instead, we need to refocus our attention on domestic energy production and wean ourselves off energy from hostile nations. Additional “climate” regulations will only hinder our ability to achieve this goal. Given the current global and domestic circumstances, the administration should be focused on making the basic necessities of life less expensive, not more.

The SEC has proposed disclosures that are outside of its historical purview in order to engage in environmental policy. It is, however, the role of Congress – and, importantly, not the role of financial regulators – to set climate-related policy, balancing interests and engaging with stakeholders to appropriately move us to a more energy-efficient nation. This Administration must end its assault on American businesses and the rule of law in the name of an immediate and expensive transition to a “Green New Deal” agenda. 

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