SEC seeks end to costly climate-related mandates

The Securities and Exchange Commission today proposed rescinding the costly, Biden-era rules mandating that companies provide climate-related information in registration statements and annual reports. The SEC cited a return to the agency’s core mandate and legal authority. CEI experts praised the SEC for this action. 

Kent Lassman, CEI president: 

“The action taken today by the SEC to rescind the climate disclosure rule is the most important deregulatory step taken by the agency in more than 50 years. Markets work and material information is both created and available when regulators stay on mission. Chairman Atkins is leading a pro-growth correction to the lunacy of the regulatory state.” 

Richard Morrison, CEI senior fellow: 

“The decision announced today by SEC chairman Paul Atkins to rescind the agency’s burdensome and misguided climate disclosure rule is the best possible development for U.S. financial regulation. The SEC has now acknowledged it lacks statutory authority to issue such a rule, and that alone is reason enough for it to be rescinded. But the rule has further deficiencies that should serve as a warning for future policymakers.   

“The rule would have required public companies make subjective and disparaging disclosures about their own operations, created a rent-seeking bonanza for self-interested parties to the detriment of ordinary investors, implemented climate policy disguised as financial regulation, and not come close to passing any reasonable cost-benefit test.  

“Investors and asset managers who want to prioritize climate impacts have many data sources available for doing that already. The mountain of complex paperwork the climate disclosure rule would have generated would have been a giant drag on innovation and growth and needlessly distracted managers from their core business. U.S. public companies and their shareholders and employees can breathe a sigh of relief that this bureaucratic threat will soon be gone.” 

Ondray T. Harris, CEI general counsel: 

“The SEC exists to regulate securities markets, not to serve as a national climate regulator. The Chairman’s decision recognizes an important constitutional principle: federal agencies must operate within the authority Congress has actually granted them, not the authority they wish Congress had granted them. 

“The federal government should not force businesses to become instruments for advancing political or ideological objectives. Disclosure requirements must be tied to investor protection and material financial information, not used as a mechanism to influence public debate on climate policy. 

“Today’s action represents an important step toward restoring the SEC to its core mission of protecting investors, facilitating capital formation, and maintaining fair and orderly markets.” 

Marlo Lewis, CEI senior fellow: 

“The SEC’s proposal to rescind its March 2024 climate risk disclosure rules is a major win for economic liberty, limited government, and the rule of law. Congress never authorized the SEC to be an Industrial Policy Czar for Climate and Capital.  

“Under the Biden administration, the SEC became the tip of the spear for a ‘government-wide’ program to channel the ‘flow of capital toward climate-aligned investments and away from high-carbon investments’ (EO 14008, Jan. 27, 2021). Although ostensibly an ‘independent agency,’ the SEC became the vanguard of a partisan, unlawful, market-rigging agenda.” 

Related analysis: 

Climate Disclosure’s Triple Threat (2024) 

Climate Disclosure Spam (2024) 

The SEC’s Costly Power Grab (2022) 

CEI Comments to SEC on Proposed Climate-Related Disclosures Rule and Comments Prepared by Marlo Lewis, Kevin Dayaratna, and Patrick Michaels (2022) 

Public Input on Climate Change Disclosures: Questions for Consideration (2021)

The Many Arbitrary and Capricious Aspects of SEC’s Climate Risk Disclosure Rule (2022)