Governor Tate Reeves and 15 other governors have joined together to oppose new rules proposed by the Securities and Exchange Commission (SEC) that would “compel publicly traded companies to make detailed disclosures about climate-change risks and greenhouse gas emissions.”
In late March, the SEC released new rules that would “enhance and standardize climate-related disclosures for investors,” meaning that companies would be required to report certain information on how climate risks impact the way the business works.
Here’s a list of some of the details companies would have to disclose:
- The registrant’s governance of climate-related risks and relevant risk management processes.
- How any climate-related risks identified by the registrant have had or are likely to have a material impact on its business and consolidated financial statements, which may manifest over the short-, medium-, or long-term.
- How any identified climate-related risks have affected or are likely to affect the registrant’s strategy, business model, and outlook.
- The impact of climate-related events (severe weather events and other natural conditions) and transition activities on the line items of a registrant’s consolidated financial statements, as well as on the financial estimates and assumptions used in the financial statements.
Companies would also be required to submit information about their indirect and direct greenhouse gas emissions.
A total of 16 governors, including Reeves, disagreed with the new rules, sending a letter to President Joe Biden and U.S. Securities and Exchange Commission Chairman Gary Gensler this morning.
“The proposed rule will harm businesses and investors in our states by increasing compliance costs and by larding disclosure statements with uncertain and immaterial information that the federal government−let alone the SEC−is not equipped to judge,” the letter explained. “We strongly urge you to withdraw the proposed rule and allow the market to continue serving as the appropriate mechanism for judging climate risk, as it does for other types of market risks.”
The letter included signatures from the governors of Utah, Alabama, Alaska, Arizona, Arkansas, Idaho, Iowa, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming.
Reeves tweeted about the sent letter later today, writing, “As gas prices hit record highs, rather than unleash American energy production, Pres Biden is choosing to weaponize the SEC (and I’m not talking football) to push his Green New Deal climate agenda, directing it to overstep its authority and create rules that punish businesses.”
To read the full letter, click here.
