"Congress did not intend for the SEC to be an arbiter of business strategies, much less the determining body for climate policies," the lawmakers said. "This abuse of the rule-making process, and blatant partisan efforts to circumvent the legislative process, are outside the bounds of the SEC's mission and authority."
The SEC unveiled the proposal in question, which has broad backing from institutional investors and asset managers, in March and it's expected to be finalized this year. The proposal would require public companies to disclose a host of climate-related information in their registration statements and periodic reports, including the oversight and governance of climate-related risks by the company's board and management, and how any identified climate-related risks have affected or are likely to affect the company's strategy, business model and outlook, among other requirements.
Moreover, public companies under the proposal would be required to disclose the greenhouse gas emissions they generate or purchase, and the indirect emissions generated from a company's supply chain, if material, though smaller companies would be exempt from the latter requirement, referred to as Scope 3.
The rule when finalized is likely to be challenged in court and some stakeholders believe the SEC will scale back the disclosure requirements in a final rule.
But while Republicans and business groups are largely against the proposal, stakeholders from Congress, organized labor and the $457.4 billion California Public Employees' Retirement System, Sacramento, voiced their support for it during a Feb. 9 Capitol Hill event.
In their letter, the Republican lawmakers outlined a host of requests and questions for Mr. Gensler regarding the proposal.
The questions include:
- Has the SEC considered the impact that the proposed climate disclosure rule would have on energy prices and any other costs associated with the rule?
- Has the SEC coordinated with the White House Climate Policy Office or any other components or offices of the Executive Office of the President on the policies contained in the proposed climate disclosure rule?
- Have you or any SEC employees in the Office of the Chairman or the Office of the General Counsel received or considered any legal advice or analyses (either internal or external to the SEC) regarding whether the SEC lacks the statutory authority to promulgate any portions of the proposed climate disclosure rule?
The lawmakers requested the information by March 8 and also asked for a list of all current and former SEC employees who have worked on the proposal and whether any employees have "carried out any SEC business related to the proposed climate disclosure rule on a private, nongovernmental device."