Bloomberg Law reported on letters from Senate Banking and Environment & Public Works committee Republicans and Senator Joe Manchin (D-WV) to SEC Chair Gary Gensler urging him to retract the SEC’s proposed climate disclosure rule.
Among numerous other concerns, the senators questioned the proposal’s alignment with the SEC’s tripartite mission and the seeming politicization of the agency in putting the onus on public companies to facilitate an environmental regulation that encompasses gathering and disclosing direct and indirect emissions data and other information (in many cases without regard to materiality), which will impose substantial compliance costs that are likely not sustainable for smaller resourced companies in particular.
The rule would further adversely impact many upstream/downstream non-public companies that will likely incur costs or risk losing business unless they are able to provide acceptable emissions data to issuers (other than SRCs) that will need the information to fulfill the proposed Scope 3 mandates. Along those lines, the SEC’s proposal suggests issuers may mitigate their Scope 3 data collection requirements or impacts by choosing different suppliers and distributors and/or helping their upstream/downstream parties reduce their emissions (p168).
The Society, with the drafting and review participation of a more than 80-member working group, is working on a comment letter in response to the proposal.
See “SEC Is Heading Toward a Climate Train Wreck: Joseph A. Grundfest” (Bloomberg Law); “Joe Manchin opposes SEC climate disclosure rule, says it targets fossil fuel companies” (CNBC); and additional resources on our Climate Risk & Disclosure page.
This post first appeared in the weekly Society Alert!