{"id":2238486,"date":"2024-05-06T15:44:02","date_gmt":"2024-05-06T19:44:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sec-climate-rule-is-a-lose-lose-for-companies-and-climate-leadership\/"},"modified":"2024-05-06T15:47:40","modified_gmt":"2024-05-06T19:47:40","slug":"sec-climate-rule-is-a-lose-lose-for-companies-and-climate-leadership","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sec-climate-rule-is-a-lose-lose-for-companies-and-climate-leadership\/","title":{"rendered":"SEC&#8217;s climate rule harms both businesses and environmental progress"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsec-climate-rule-is-a-lose-lose-for-companies-and-climate-leadership%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2238486&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>The \u2064Securities and Exchange Commission\u200d is facing legal challenges regarding its new climate rule, which mandates reporting\u200c of\u2062 greenhouse\u2064 gas emissions and climate risks, beyond its mandate.\u2063 Concerns arise over liability risks,\u2064 ambiguity in\u200d defining climate risks, and \u200dthe potential for activist \u200cinterventions.\u200d Businesses and \u200bregulators \u200bclash over\u2064 the rule&#8217;s broader environmental\u2063 objectives and its impact on \u2063investor \u200bprotection.  <\/p>\n<p class=\"readmore\">\n    <button onclick=\"showReadMore()\" id=\"readmorebtn\">Read more&#8230;<\/button>\n<\/p>\n<hr id=\"line\">\n<span id=\"more\"><\/p>\n<div>\n<p>Unsurprisingly, the <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/sec\/\" target=\"_blank\" rel=\"noopener\" title=\"climate-related risks,\">Securities and Exchange\u00a0Commission<\/a> is facing legal challenges to its new <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2024-31\" target=\"_blank\" rel=\"noopener\" title>climate rule<\/a> after years of warnings from companies, investors, and activists alike. The novel rule, which forces publicly traded companies to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sec-pauses-extremist-climate-mandate-after-challenge-from-republican-attorneys-general\/\" title=\"SEC Halts 'Extremist Climate Mandate' Amid GOP AG Challenge\">report greenhouse gas emissions<\/a> and exposure to other <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/climate-change\" target=\"_blank\" rel=\"noopener\" title=\"climate-related risks,\">climate-related risks,<\/a> goes well beyond the\u00a0SEC\u2019s\u00a0mandate to protect investors and facilitate efficient capital formation. <\/p>\n<p>Now that the industry has\u00a0had time to examine\u00a0the 885-page rule more closely, <a href=\"https:\/\/www.washingtonexaminer.com\/tag\/business\" target=\"_blank\" rel=\"noopener\" title=\"businesses\">businesses<\/a> are raising concerns that the thicket of disclosure requirements creates significant legal risk for them and their shareholders, the very investors the SEC\u00a0was\u00a0created\u00a0to protect.<\/p>\n<p>Many of those concerns were on display\u00a0at a House Financial Services Committee hearing last month. Liberty Energy CEO Chris Wright, whose company is one of the dozens of entities suing the SEC over the rule, testified that the disclosure requirements increase his\u00a0firm\u2019s\u00a0liability risks while doing little to address climate change.<\/p>\n<p>Wright emphasized that the SEC is used to dealing with the specificity of company balance sheets and has\u00a0no\u00a0experience with greenhouse gas emissions reporting. <\/p>\n<p>Under the rule, there is much ambiguity about what constitutes a\u00a0\u201cmaterial\u201d\u00a0climate risk, especially regarding the disclosure of potential future climate risks. That makes it difficult for companies to comply with the disclosure requirement and blurs the line between essential financial information and broader environmental objectives.<\/p>\n<p>A\u00a0company\u2019s\u00a0emissions are challenging to measure and are, at best,\u00a0\u201cguestimates,\u201d\u00a0Wright told Congress.\u00a0Businesses compelled to report such\u00a0\u201cguestimates\u201d\u00a0in their SEC filings will likely find themselves the target of environmental activists challenging the accuracy of those filings.  <\/p>\n<p>Wright\u2019s\u00a0fears are not unfounded. Climate activists and environmental groups have targeted oil and gas companies for decades. SEC filings are\u00a0yet\u00a0another avenue for activists to meddle in a\u00a0company\u2019s\u00a0strategy and are economically destructive. <\/p>\n<p>Liberty Energy and other businesses believe the SEC has exceeded its authority by regulating environmental matters. They argue that the Environmental Protection Agency, which already <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/the-master-of-politicizing-schools-says-education-is-too-politicized\/\" title=\"The Master of Politicizing Schools Says Education Is Too Politicized\">regulates greenhouse gas emissions<\/a> from\u00a0major\u00a0sources, should handle this.<\/p>\n<p>SEC Commissioner Mark Uyeda <a href=\"https:\/\/www.sec.gov\/news\/statement\/uyeda-statement-mandatory-climate-risk-disclosures-030624\" target=\"_blank\" rel=\"noopener\" title>told<\/a> Congress that the rule creates a\u00a0\u201croadmap for abuse.\u201d\u00a0In his dissent to the SEC rule, Uyeda pointed out how various special interests can, and do, \u201chijack federal securities laws to advance their climate-related goals\u201d\u00a0by buying shares in public companies and then demanding those companies change their core business practices through the shareholder proposal process. While such changes may be in the public good, they typically fall outside the\u00a0SEC\u2019s\u00a0mandate to safeguard\u00a0shareholders\u2019\u00a0investment and are generally irrelevant to a\u00a0company\u2019s\u00a0core business. <\/p>\n<p>SEC disclosure requirements for public companies are meant to be limited to information \u201cmaterial\u201d to investors\u2019\u00a0ability to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/judge-threatens-to-dismiss-trump-over-nonresponsive-political-answers-during-testimony\/\" title=\"Judge warns of dismissing Trump due to uncooperative, partisan responses in testimony.\">make informed investment decisions<\/a>.\u00a0But\u00a0the\u00a0SEC has overstepped by going past the materiality standard and requiring disclosure of information unrelated to financial matters and investor protection. <\/p>\n<p>Wright and others have also raised First Amendment concerns, arguing that mandatory climate disclosures violate a\u00a0company\u2019s\u00a0right to free speech, especially if the disclosures are seen as controversial or speculative.<\/p>\n<p>A requirement for disclosure of irrelevant information will increase the difficulties confronting investors when choosing between alternative investments, reducing economic productivity and making companies less competitive.\u00a0It\u2019s\u00a0also likely to exacerbate shareholder challenges, raising production costs on the oil and gas upon which consumers depend.<\/p>\n<p>The SEC climate rule will\u00a0profoundly affect the oil and gas industry, discouraging investors from supporting American companies and potentially leading to a shift in demand toward private enterprises and foreign, often government-owned, production.\u00a0This scenario\u00a0is far from ideal, both economically and environmentally, since it will push emissions to corners of the world without the same vigorous environmental standards as the United States.  <\/p>\n<p><strong><a href=\"https:\/\/www.washingtonexaminer.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER<\/a><\/strong><\/p>\n<p>In fact, since 2005, the U.S. has reduced emissions from the power sector <a href=\"https:\/\/www.eia.gov\/totalenergy\/data\/monthly\/index.php#environment\" target=\"_blank\" rel=\"noopener\" title>by more than 36%<\/a> by switching from coal power to natural gas.\u00a0This natural gas was inaccessible until companies such as Liberty Energy pioneered technologies such as directional drilling and fracking, which enabled access to new gas reserves. <\/p>\n<p>While a reasonable framework for disclosure of material climate risks and emissions makes sense, the SEC has overreached with this climate rule.\u00a0It should be scrapped\u00a0in the best interests of the energy sector and investors\u00a0alike.  <\/p>\n<p><em>Todd\u00a0Johnston\u00a0is the vice president of policy at ConservAmerica. Todd previously served at the Virginia Department of Environmental Quality and on committees with jurisdiction over environment, infrastructure, and energy issues in the Senate and the House of Representatives.<\/em><\/p>\n<\/p><\/div>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities and Exchange Commission is encountering legal opposition to its climate rule. Despite prior alerts from companies, investors, and activists, the rule mandates public companies to disclose emissions and climate risks. This extends beyond the SEC&#8217;s investor protection role<\/p>\n","protected":false},"author":3122,"featured_media":2238487,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/04\/AP22032674384912-1024x634.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2238486","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/04\/AP22032674384912-1024x634.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2238486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/3122"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2238486"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2238486\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2238487"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2238486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2238486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2238486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}