WASHINGTON—The Securities and Exchange Commission (SEC) is proposing a radical new climate rule that would force American companies to comply with the Biden administration’s environmental agenda, will supercharge inflation, and threaten the viability of thousands of small businesses.
This rule would force businesses to disclose detailed accounts of their comprehensive climate footprint, and the hypothetical impacts of climate change on their current and future business operations. They would have to collect and publish information about their own greenhouse gas emissions and those of their suppliers and customers, including small businesses not currently subject to SEC rules. Finally, companies would even have to disclose how often their boards even talk about climate change, raising serious free speech concerns. Even the SEC itself has said this rule would more than double the cost of being a public company. This one rule would drive up the costs of yearly corporate reports more than all the 80 years and thousands of existing pages of SEC rules combined.
The Heritage Foundation is fighting back against this destructive rule, and in doing so, putting into motion its new plan to fight the administrative state and reclaim self-government and the rule of law for the American people.
The SEC published its proposed Climate Disclosure Rule in March, and the public comment period ends Friday. During this period, any member of the public can file comments with the agency, laying out concerns about how the rule will impact them or their communities—and the agency is bound by federal law to respond. If it fails to do so, the rule can be challenged in court and struck down.
Shortly after the rule was published, Heritage began working with conservatives across the movement, business leaders, and other concerned Americans to file thousands of comments. Heritage scholars are also filing comments totaling more than 100 pages.
Heritage Action also created an issue toolkit, “Block Biden’s Climate Regulation,” that explains what the new financial disclosure rules mean and how they will affect American business, investors, and working Americans who rely on these companies for vital goods and services. Fossil fuels provide the vast majority of our energy and impeding investment in energy will squeeze supply and lead to higher prices. So far, Heritage and Heritage Action efforts have led to more than 2,600 unique comments being filed.
Paul Ray, director of Heritage’s Roe Institute for Economic Policy Studies and former “regulations czar” during the Trump administration, released the following statement about the rule and Heritage’s efforts to fight it:
“This rule would adopt a policy that Congress has rejected and divert American companies toward aggressive new climate policies. Americans depend on these companies for the many goods and services that make our way of life the envy of the world, but the rule would drive up the cost of these vital goods and services—at a time when millions are feeling the pain of inflation. The rule claims to serve investors, but it would diminish investment returns by more than doubling the cost of yearly securities filings, as even the SEC admits.
“The proposed rule is made worse by the fact that it glosses over much of the harm it would do—to small businesses who would be forced to spend precious resources to track their emissions, and to American workers who will find themselves unemployed when those businesses cannot afford to pay them.
“We have a profound disagreement about climate policy in this country. Our Founders empowered Congress to debate and resolve disagreements just like this. Administrative agencies like the SEC exist to carry out the decisions of Congress, not to make an end-run around the legislative process when it does not work the way they would like.”
Roger Severino, Heritage vice president of domestic policy, also released a statement on Heritage’s efforts to fight the administrative state:
“For too long, the left has used the federal bureaucracy to exert unconstitutional authority over the American people. It’s far past time for conservatives to declare those days at an end. We must stop the Biden administration from forcing through destructive policies via the executive branch that hurt Americans and undermine our interests.
“Heritage is eager to engage this fight. The battle against the administrative state is one of the fights of our generation, and Heritage will do everything we can to see it won.”