Reps. Sean Casten, D-Ill.; Juan Vargas, D-Calif., and Kathy Castor, D-Fla., along with more than 75 House Democrats, sent a letter to SEC Chairman Gary Gensler Monday urging him to quickly finalize the agency's climate disclosure rule.
"You have drafted a well-reasoned proposal that is grounded in financial materiality, aligns with the demands of investors and market participants, and is clearly within the SEC's mission, authorities, long-standing norms, and responsibilities," the lawmakers wrote in the letter. "We urge you to finalize and adopt a credible mandatory disclosure rule as quickly as possible."
The SEC unveiled its controversial climate disclosure rule in March 2022, which would require public companies to unveil a host of climate-related information in their periodic reports and registration statements. However, the agency has yet to finalize the rule, with its most recent regulatory agenda scheduling finalization for October.
Many Republicans in Congress are vehemently opposed to the climate disclosure rule, often stating it exceeds the SEC's authority.
However, the Democratic lawmakers wrote in their letter, "The proposed rule is squarely within the commission's authority and mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate the formation of capital."
The letter also points to the European Union's Corporate Sustainability Reporting Directive, which will enhance climate disclosure requirements for companies within the EU and those that have substantial activity in the EU.
"We are not naive to the environment that has unfortunately injected politics into requirements that should not be controversial and will better enable investors to analyze investment risk and return, allocate capital efficiently, and prioritize investment stewardship and engagement," the lawmakers wrote. "However, this should not be a reason for continued delay."
Mr. Casten and Mr. Vargas are also members of the House Financial Services Committee and co-chairs of the Congressional Sustainable Investment Caucus, which they formed in January to inform policy related to environmental, social and governance investing.
Committee Republicans, meanwhile, have formed an anti-ESG working group and dedicated the month of July to holding a series of hearings on ESG. At a hearing on July 12, Mr. Casten said, "If it's partisan to defend free markets and competitive and investor rights, let's double down on the partisanship, because it's the only way we move forward as a country."
In March, more than 50 Democrats from both the House and Senate wrote a letter to Mr. Gensler, similarly asking him to finalize the climate disclosure rule in a timely manner.