U.S. Rep. Bill Huizenga (R-MI) and U.S. Sen. Tim Scott (R-SC) this week demanded that the Securities and Exchange Commission (SEC) provide them with records and other information related to its proposed climate disclosure rule.
“The Enhancement and Standardization of Climate-Related Disclosures for Investors,” which the SEC proposed in March 2022, exceeds the commission’s mission, expertise, and authority and, if finalized in any form, will unnecessarily harm consumers, workers, and the nation’s economy, according to a Feb. 22 letter the Republicans sent to SEC Chairman Gary Gensler. The letter was signed by Rep. Huizenga, chairman of the House Financial Services Oversight and Investigations Subcommittee, Sen. Scott, ranking member of the Senate Banking, Housing, and Urban Affairs Committee, and U.S. Rep. Patrick McHenry (R-NC), chairman of the U.S. House Financial Services Committee.
“Congress created the SEC to carry out the mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation — not to advance progressive climate policies,” the Republicans wrote. “Instead of pursuing its clear statutory mission, the SEC, under your leadership, has chosen to flout the democratic process and pursue its progressive social agenda through the promulgation of this extraordinarily expansive climate disclosure rule.”
The lawmakers also reminded Gensler that under his leadership, the SEC has shifted away from its principles-based disclosure regime to a partisan, activist, and prescriptive approach that includes implementing a climate agenda that is outside the scope of its mission.
“These efforts far exceed the SEC’s authority, jurisdiction, and expertise,” they wrote.
Recently, they added, it was reported this month by Politico that Gensler and other SEC officials have acknowledged the same concern and are now weighing the impact of potential legal challenges the SEC could face with the proposal climate disclosure rule once it’s finalized.
“This aggressive, overly broad approach to controversial rulemaking is particularly concerning in a time where prices are skyrocketing,” wrote the members.
They asked Gensler to answer numerous questions, including whether the SEC has considered the impact that the proposed climate disclosure rule would have on energy prices and any other costs associated with the rule, and requested that he provide responses to previously unanswered requests made by members in both houses of Congress.