Climate Overreach at the SEC: What Comes Next
The Securities and Exchange Commission (SEC) today voted to recommend new proposed rules by which public companies would be required to disclose additional information about climate-related topics. This process began last year when then-Acting Chair Allison Herren Lee opened a request for information from the public on how the agency should go about writing such a proposal. That public request was posted March 15, 2021, just a little over a year ago.
The announcement at today’s open meeting was disappointing, but not unexpected. The proposal would expand the SEC’s authority and distort the traditional definition of “materiality” that has served markets and firms well for decades. Despite repeated insistence to the contrary, this initiative—and similar ones in other federal agencies—are simply “more climate change activism in a finance regulation wrapper.” More detailed responses from myself and my colleagues Myron Ebell, John Berlau, and Wayne Crews are in today’s press release.
Now that the long-awaited rule has been released, interested parties will gear up to write comment letters in response, and we at the Competitive Enterprise Institute are eager to add our analysis to the mix, as we did in response to the original request for public response last March. The deadline for commenting is May 20, 2022. There is also the possibility of a legal challenge to the final SEC rule when it is published. Jonathan Brightbill and Jennifer Roualet at Winston & Strawn’s D.C. office wrote a detailed analysis late last year on several potential strategies for challenging the then-future rule, including constitutional, statutory, and procedural claims.
For more background on the topic, see these documents:
- “SEC Climate Disclosure Rule Will Cause Big Problems, CEI Experts Predict,” press release (3/21/22)
- “Expect Big Pivot from SEC on Climate, ESG,” Real Clear Policy (3/18/22)
- “New Climate Disclosure Rule Coming Soon from SEC,” OpenMarket (3/16/22)
- “The ESG Backlash,” National Review (3/9/22)
- “Climate Tyrants’ New Tactics,” Law & Liberty (2/9/22)
- “Forecast for the SEC: Storm’s a Comin’,” National Review (7/20/21)
- “Public Input on Climate Change Disclosures: Questions for Consideration,” Richard Morrison comment to the SEC (6/11/21)
- “Climate Risk Disclosure,” Marlo Lewis, Jr. comment to the SEC (6/11/21)
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