On December 7, the American Enterprise Institute (AEI) hosted an event forum that featured a discussion surrounding the Securities and Exchange Commission’s (SEC) proposed climate disclosure rule and its implications. SEC Commissioner Hester Peirce, keynote speaker, shared her own criticisms and viewpoints on the proposed rule.
Peirce opened her remarks by stating her views were her own, and not of that of the SEC. She also made references to various comment letters that she had deemed noteworthy, based on the insight they provided. She called out many of the rule’s flaws and complications, specifically noting that “some aspects of the rule may end up interfering with corporate decision making.”
- Hester Peirce (SEC Commissioner): Borrowing the football analogy, Peirce classified the rule as a “flea flicker in its own right: cast to bring consistency, comparability and reliability to the proposal, much of which is rooted in conjecture, instead bringing investor confusion.” The Commissioner’s comments made it clear that she was not supportive of the proposed rule and its interference into an area that would cause widespread investor misunderstanding and unnecessary financial burdens for companies.
The event also featured four other panelists, including former SEC Commissioners, who provided their own unique views on the subject matter.
- Paul Atkins (Former SEC Commissioner and CEO of Patomak): Atkins called the proposal an “information overload” destined to do irreparable damage to the Commission’s regulatory and enforcement program. He ultimately called on the proposal to be withdrawn since it would fall afoul of the Major Questions Doctrine and met with the same legal challenges as the EPA in the Clean Power Plan.
- Melissa MacGregor (Managing Director at SIFMA): MacGregor reiterated her association’s standing and views on the rule noting that they have advocated for a “happy medium to help improve these disclosures by requiring the disclosure of ‘decision useful’ information, without imposing unnecessary burdens on both registrants and investors.” She also stated that SIFMA believe that “under no circumstances should the Commission stray from the existing materiality standard used in all other disclosures.”
Other panelists voicing opposition to the rule were Rob Jackson, former SEC Commissioner and Madison Condon, Law Professor at Boston University.
The SEC climate disclosure rule is a misguided idea fraught with myriad problems. At the end of the day, the SEC has to consider the more than 14,000 comments that it received on its proposed climate disclosure rule. But, the Commission should also consider the judgments of Commissioner Peirce and consider all consequences of the rule’s actions on the business community. The SEC’s proposed rule continues to cause turmoil between the SEC and the investors who will be inundated with unnecessary and burdensome compliance requirements.