Republicans seek records on SEC climate disclosure proposal

Republicans seek records on SEC climate disclosure proposal

Rep. Patrick McHenry, a Republican of North Carolina and ranking member of the House Financial Services Committee, speaks during a hearing in Washington, D.C.

Andrew Harrer | Bloomberg | Getty Images

WASHINGTON — Top GOP lawmakers are pressing Securities and Exchange Commission Chair Gary Gensler on the agency’s proposal for climate-related disclosures for investors, according to a letter released Wednesday.

Reps. Patrick McHenry, R-N.C., chairman of the House Financial Services Committee, Bill Huizenga, R-Mich., chairman of the panel’s Subcommittee on Oversight and Investigations and Tim Scott, R-S.C., ranking member of the Senate Committee on Banking, Housing, and Urban Affairs, demanded detailed information from Gensler on the controversial “Enhancement and Standardization of Climate-Related Disclosures for Investors.”

“Congress created the SEC to carry out the mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—not to advance progressive climate policies,” the letter addressed to Gensler states. “Instead of pursuing its clear statutory mission, the SEC, under your leadership, has chosen to flout the democratic process and pursue its progressive social agenda through the promulgation of this extraordinarily expansive climate disclosure rule.”

The request is part of the GOP’s sustained scrutiny of the proposal to require publicly traded companies to disclose to investors how their operations affect the climate and contribute to carbon emissions. Gensler recently announced that the agency is considering adjustments to the proposal, first introduced in March 2022, after pushback from investors.

Gensler told CNBC’s “Squawk Box” earlier this month that the proposal simply required a clear climate transition plan from public companies.

“Some companies have targets (on) how to manage this,” he said. “And it was: if you have something, just disclose it and sort of describe it so that the investing public has the material features of those plans in that regard.”

Republican lawmakers have balked at what they call the SEC’s overreach into business practices. In the letter, they accuse Gensler of abusing “the rulemaking process” and said that “blatant partisan efforts to circumvent the legislative process” are outside of the SEC’s oversight.

An SEC spokesperson said Gensler would respond to the GOP lawmakers directly.

In the letter, the lawmakers requested answers to seven questions and accompanying documentation on the disclosure proposal, including minimization of First Amendment concerns, possible coordination with the White House and a list of any SEC employees who worked on the proposal, by March 8.

House Republicans have deployed their new majority powers in part to target firms and agencies that have pushed to make social considerations a larger piece of investing.

Earlier this month, McHenry formed a Republican working group on environmental, social and governance, or ESG, plans in part to target the rule disclosure. ESG platforms broadly apply to taking into account the environmental and social implications of a company’s decisions, and not just its financial performance, as part of investing decisions.

Many House Republicans have criticized ESG plans — but some of them have received campaign contributions from the very financial firms they are targeting.

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