America’s top financial regulator issued climate disclosure rules that are more burdensome for smaller companies than large companies, according to the agency’s own analysis.
While the rules would cost large corporations $640,000 at first and $530,000 in subsequent years, they would cost smaller publicly-traded companies $490,000 initially and $420,000 in following years, the Securities and Exchange Commission (SEC) said in its proposal. The regulator’s analysis suggests that smaller companies would feel a relatively larger financial burden as a result of the proposed disclosure rules.
“This climate rule making is unlike anything I’ve seen in my 25-year career in securities law, in the breadth and scope of the proposals,” David Lynn, a partner at the law firm Morrison & Foerster and a former SEC official, told The Wall Street Journal on Tuesday. “It is standing up a whole new disclosure regime.”
The Democratic-majority SEC proposed a series of climate disclosure requirements on March 21 that would mandate public companies to publish emissions data, how severe weather events may affect their business activity and how they planned to transition to a less carbon-intensive business model. (RELATED: Democrats Look To Sustainable Investing Craze As Means For Pushing Climate Agenda)
Banking Committee Chairman Sherrod Brown and Ranking Member Pat Toomey speak with SEC Chair Gary Gensler before a hearing on Sept. 14 in Washington, D.C. (Bill Clark/Pool/Getty Images)
After the rules were proposed, critics slammed the commission — led by Chairman Gary Gensler who President Joe Biden appointed in early 2021 — arguing that it overstepped its congressional authority.
“The proposal will not bring consistency, comparability, and reliability to company climate disclosures,” Hester Peirce, the sole Republican commissioner on the SEC, said at the time. “The proposal, however, will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable, and reliable company disclosures. We cannot make such fundamental changes to our disclosure regime without harming investors, the economy, and this agency.”
Peirce added that the SEC underestimated the costs the rules would inflict on companies. Overall, the SEC projected the proposals to cost companies an estimated $10.2 billion, Politico reported.
Earlier this month, the SEC extended the deadline for interested parties to file a comment on the rules until June 17.
The SEC did not immediately respond to The Daily Caller News Foundation’s request for comment.
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