The Securities and Exchange Commission (SEC) is pressing on towards its controversial climate disclosure proposal, and the agency is relying almost exclusively on the support of foreign actors.
The risks to the American economy are apparent. Still, the Biden administration agency insists on pushing through new regulations for firms to report their total energy emissions.
The SEC’s jurisdiction is limited to publicly traded companies, but the pending legislation aims to pressure private businesses to comply. Carbon emissions that reveal the behavior of their customers would be compelled to be reported.
Firms would be required to report direct greenhouse gas emissions as well as those emitted indirectly through electricity and other types of energy use.
Most contentious in the debate is the provision that many say will burden smaller companies that are part of the supply chains of major corporations. And companies that are out of line with the administration’s environmental standards risk fines and lawsuits.
Democrats, Republicans find common ground over concerns with SEC's climate disclosure proposal https://t.co/yXuDneXGLE
— Andrew Ramonas (@andrewramonas) December 27, 2022
Republicans and even some Democrats are up in arms over the proposed change. Opponents argue that the Supreme Court’s recent ruling in West Virginia v. EPA established that the agency does not have statutory authority to carry out its proposal.
Five Democratic representatives sent a letter to the SEC voicing their concerns over the harmful impact that vendors and suppliers of major corporations would face.
So who actually supports the proposal? According to analysis by the Western Energy Alliance, an organization of small independent energy producers, over 80% of asset managers listed by the SEC as supporting the change are foreign.
In stark contrast, only 7% of U.S. asset managers are in favor.
The Alliance revealed that activist investors are being touted by the agency as representing the vast majority of Wall Street. In fact, seven climate change organizations are part of multiple coalitions, creating the illusion that there is broad support for this undue burden on American business.
In its report, the Alliance cited evidence that the groups are “so intertwined” that it hides the fact that they represent only a “minority of investors.” Of the coalitions’ members and supporters, only 19% are U.S. based.
The underpinnings of the U.S. economy, particularly with Biden’s inflationary policies in full effect, do not need to absorb more structural damage. But the efforts of the SEC, disguised as a grassroots push for climate change advocacy, promise to do exactly that.