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Rep. Ashley Hinson (R-IA) grilled Securities and Exchange (SEC) Chairman Gary Gensler over the agency’s move to enact onerous climate change disclosures for businesses.
Hinson asked about the SEC’s move to require companies to disclose the alleged effects of extreme weather and climate change, a rule that was considered too onerous by the likes of even leftist companies such as Amazon.
Hinson asked, “Where in here specifically did Congress give you the statutory authority, the jurisdiction, to enact this climate rule?”
Gensler said that the agency has to ensure that investors get to decide based on “full, fair, and truthful disclosure.”
Hinson interrupted Gensler, noting that the Securities Act and the Exchange do not appear to provide the SEC statutory authority over securities and greenhouse gases.
“What it does say is that when a company does offer a sale of a security to the public, that the public gets the description of the business, the material information, and that they can’t mislead the public, and what’s happening now is that the public, well over a thousand companies today, in the markets, that are putting out disclosures about climate risk,” Gensler said.
“We are merit neutral,” Gensler claimed. He said that they are trying to bring consistency to the disclosures that companies are voluntarily providing to the public, which raises the question about the need to force other companies to disclose the alleged risk of climate change and extreme weather.
Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), speaks during a House Appropriation Subcommittee hearing in Washington, DC, on Wednesday, May 18, 2022. (Al Drago/Bloomberg via Getty)
“Well it’s very clear in these sections, it is not explicit as far your lane is concerned, and I say it’s time to reel it in,” she said.
Hinson also asked about the SEC’s “expansive” reporting requirement for Scope 3 greenhouse gas emissions, contending that it would have a devasting impact on Iowa farmers. She reiterated that these anti-climate change moves exceed the SEC’s statutory authority.
The Wall Street Journal (WSJ) reported that the proposed climate change disclosure rule would require companies to a substantial amount of data:
The proposed reporting rules would require public companies to include a raft of climate data in their audited financial statements. The mandated disclosures cover everything from costs caused by wildfires to the loss of a sales contract because of climate regulations, such as a cap on carbon emissions.
Companies would have to analyze climate-related costs and risks for each line item of their financial statements, such as revenue, inventories or intangible assets. Any climate costs that are 1% or more of each line item total would have to be reported.
Under current rules, companies are generally required to disclose only those climate costs and risks they judge to be material, or significant, for investors. SEC officials are concerned that too few companies are reporting such important climate costs and risks.
The WSJ also reported that the SEC may scale back the rule after the agency was “taken back” by the strength of the opposition.
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter @SeanMoran3.
