Recently, RealClearFoundation senior corporate governance fellow Bernard Sharfman and Manhattan Institute director of legal policy James Copland joined forces for a Wall Street Journal op-ed to discuss their views on the Securities and Exchange Commission’s (SEC) proposed climate disclosure rule. The title of the piece says it all, “The SEC Can’t Transform Itself Into a Climate-Change Enforcer: It should junk its proposed disclosure rule, which is clearly unconstitutional as per West Virginia v. EPA.”

Sharfman and Copland argue that the climate disclosure rule would directly exceed the authority given to them by Congress. And much like the EPA’s Clean Power Plan, the disclosure rule should and will be struck down if taken to the Supreme Court. In their comment letter to the SEC, they warned the agency that Congress never gave them the task of overseeing environmental issues, which is exactly what the SEC is trying to do with the proposed rule. In addition, the inclusion of indirect and immaterial greenhouse gas emissions disclosures also violates the “materiality standard” which “limits mandated disclosures to financially material information.”

Specifically, Sharfman and Copland explain, the proposed climate disclosure rule would violate the “major questions” doctrine, which directs an agency’s power to act on matters of economic and political significance unless given clear authorization by Congress. The SEC should withdraw its proposed rule before it meets the same fate as the EPA faced by the Supreme Court with the “major questions” doctrine. Sharfman and Copland’s material should be required reading for those following this blatant example of “SEC Mission Creep.” 

Read the full op-ed HERE.

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