The main criticisms surrounding the Securities and Exchange Commission’s (SEC) proposed climate disclosure rule have varied, but one seems to remain rather consistent. With their proposed rule, the SEC is straying into areas in which they have no congressionally-delegated authority.
Earlier this month, Federal Reserve Chair Jerome Powell added his thoughts to the argument. When asked about the Federal Reserve’s role in fighting climate change, Powell made it abundantly clear that the Reserve is not and will not be a “climate policymaker.” In addition, Powell commented on the need to follow congressional authority stating that there’s a need to “steer clear of issues that are more properly overseen by elected officials.”
The SEC is an independent government agency that has no authority to write rulemakings that require companies to disclose costly and practically incalculable Scope 3 emissions. That being said, the SEC should be taking a page out of Federal Reserve Chair Powell’s book and realize that this mandate would be utterly out of step with the SEC’s congressionally-mandated mission.
The SEC should highly consider reining in their climate disclosure rule to better reflect their original authority. The SEC’s mission is to provide stability to the financial sector, not initiate rulemakings that would financially jeopardize our nation’s businesses and the investments and retirement accounts of countless millions. The Commission should take all comments of opposition under review before finalizing the rule.