The SEC has received two comment letters from members of Congress--one from the House of Representatives and one from the Senate--criticizing its proposal for mandatory climate disclosures.  Specifically, forty (40) Republican Congressmen and nineteen (19) Republican Senators have signed onto these comment letters that describe the SEC's proposal as, respectively, "outside of its historical purview," and "not within the SEC"s mission."

Fundamentally, this criticism is not surprising.  The Biden Administration is using the SEC to advance its climate agenda, and that Congressional Republicans oppose these Democratic policies is utterly routine, and barely newsworthy.  The significant partisan divide over the response to global climate change has been evident for decades.    

Similarly, the specific critiques offered by these public comment letters reflect many of the public criticisms of the SEC's proposal, including the internal critiques publicized by current and former Republican SEC Commissioners.  These criticisms include, among other things, that "[t]he proposed new required disclosures fail the materiality test," that it would "add additional red tape and bureaucracy that would be extremely burdensome," and that the "SEC is not tasked with environmental regulation."    

Interestingly, though, both letters from the House and Senate assert that the SEC has infringed upon Congress' authority by promulgating these proposed disclosures.  Specifically, the letter from the House Republicans states that it is "the role of Congress--and, importantly, not the role of financial regulators--to set climate-related policy" and the Republican Senators' letter proclaims that "devising climate policy is the job of elected lawmakers, not unelected regulators at the SEC."  This position possibly reflects a legal strategy currently embraced by the conservative moment, which is to re-assert Congressional supremacy over the administrative state.  It is possible that the move by the Biden Administration to use the SEC to enact environmental policy may provide a new arena to test this legal approach. 

We are writing regarding the Securities and Exchange Commission’s (SEC) new proposed rule on climate-related disclosures, which would require publicly-traded companies to disclose their greenhouse gas (GHG) emissions and other information related to climate change. We thoroughly oppose the proposed rule and urge the SEC to withdraw the new disclosure requirements.