Oversight Republicans target SEC climate disclosure proposal

Republicans on the House Oversight Committee are targeting the Securities and Exchange Commission’s (SEC) proposed rule that would make companies disclose information about their contributions to climate change.

In a Wednesday letter that was first obtained by The Hill, the panel’s 19 Republicans requested a briefing and documents on the proposal.

“The American people have a right to know what, if any, effect the Rule will have on their ability to access affordable goods and services,” they wrote.

They also called the proposed rule “an overly broad expansion of the SEC’s authority” and said it “contravenes the mission of the agency.”

The lawmakers asked for the committee’s communications relating to the proposal, as well as any communications with the White House National Economic Counsel and outside groups that may have occurred. 

As members of the minority party, Republicans are limited in their oversight powers, but the issues they home in on now may provide insight as to what they will pursue if they retake the majority next year. 

The Hill has reached out to the SEC for comment.

The regulation in question would require companies to reveal to investors both ways in which climate change may threaten their financial stability and also information about their own contributions to climate change.

It would force them to share information about direct emissions from their operations, and, if it’s “material” to investors, the companies would also have to share information about how the use of their products contributes to climate change.

When it was proposed in March, SEC Commissioner Allison Lee defended it, noting that “physical and transition risks from climate change can materialize in financial markets in the form of credit risk, market risk, insurance or hedging risk, operational risk, supply chain risk, reputational risk and liquidity risk.” 

And, while Republicans are calling the rule too broad, progressives have argued that it has loopholes that companies may exploit to get out of painting the whole picture of their climate contributions.