On Forbes “What’s Ahead” video series, Steve Forbes delves into the Securities and Exchange Commission’s (SEC) proposed climate disclosure rule and the negative effects it will have on companies and our economy.
The climate disclosure rule that Gary Gensler, Chairman of the SEC, has proposed goes far beyond the SEC’s authority. The proposed rule is 500 pages long and is full of additional information companies will be required to disclose to investors – including additional tracking of their greenhouse gas emissions – should the rule be enacted.
The bottom line is the new proposed rule is unnecessary. Companies are already legally obligated to report information about their emissions to investors that could affect the value of their company, adding additional regulation will only reduce a company’s efficiency and productivity. Calculating these kinds of greenhouse gas emissions will be extremely complicated for companies, and increase costs by more than all previous SEC rules combined. Small companies especially cannot afford these compliance measures and many will end up having to go private, and it will undoubtedly end up burdening consumers as well.
One particularly concerning rule Forbes points to is that companies will now be required to disclose possible risks to facilities that are considered prone to “severe weather” to discourage companies from locating in “climate exposed regions.” Forbes argues this “eliminates most of the U.S. The Northeast has ‘northeasters’, the south – hurricanes, California – earthquakes, the Midwest – tornadoes, the West – severe snowstorms.” Another is companies will have to reveal how often they talk about climate related issues in private.
See Steve Forbes full video here.