Back in March, the Securities and Exchange Commission introduced a 534-page proposal that would force publicly traded companies to disclose their environmental impact —greenhouse emissions as well as the energy they consume would need to be tracked and made public.
The proposal even suggested supply chain emissions and customer emissions be tracked as well.
President Biden and his administration are under intense pressure from climate crusaders on the far left, making this proposal —however unfriendly it is to American businesses —likely to go through, despite the fact that it’s clearly a government overreach.
According to the Wall Street Journal back in March, “SEC members voted 3-1 to issue the proposal, which will be open for public comment for at least two months before the agency will begin work on a final rule. Commissioners voted along party lines, with all three Democrats backing the proposal.”
Former SEC division director Meredith Cross says the proposed rule is “the most extensive, comprehensive and complicated disclosure initiative in decades.”
“This is a thinly veiled effort to have unelected financial regulators set climate and energy policy for America,” says Sen. Pat Toomey (R- PA).
And he’s right —and companies are pushing back. Not only on the egregious overreach, but on the exorbitant costs associated with tracking all the climate data.
“The Securities and Exchange Commission estimates the plan will raise the cost to businesses to comply with its disclosure rules from $3.9 billion to $10.2 billion,” WSJ reports. “The leap in expense equates to an ongoing additional cost of $420,000 a year on average for a publicly listed small company and $530,000 a year for a bigger firm, the SEC said.”
But those numbers are just estimates —the true costs could be much higher.
“This climate rule making is unlike anything I’ve seen in my 25-year career in securities law, in the breadth and scope of the proposals,” said David Lynn, a partner at law firm Morrison & Foerster and former senior SEC official. “It is standing up a whole new disclosure regime.”
That’s right —and it may be entirely unnecessary, as well. Four out of Five S&P 500 companies reported greenhouse gas emissions —and the energy they purchased —in 2020. The government may be trying to fix something that isn’t exactly broken.
“Republicans, who oppose the SEC’s move to oversee climate disclosures, are also flagging costs as a concern,” WSJ reports. 19 senators told the agency its proposal “comes with enormous costs for employers” —the billions in compliance costs would cut into investor profits.
Remember the 9 most terrifying words in the English Language: “I’m from the government, and I’m here to help.”