Group of Congressmen balk at SEC climate reporting rule
\On May 25, a group of 118 members of the U.S. House of Representatives sent a letter to Securities and Exchange Commission (SEC) Chairman Gary Gensler expressing concerns about the SEC’s proposed rule on “Enhanced and Standardization of Climate-Related Disclosures for Investors.”
Georgia’s Rick Allen, Buddy Carter, Andrew Clyde, Drew Ferguson and Austin Scott signed the letter, which they say would be unnecessarily burdensome on farmers, who are outside the SEC’s responsibility.
The congressmen said if promulgated, the rule “would be a significant and unworkable regulatory burden, and a considerable departure from the SEC’s mission to protect investors, facilitate capital formation, and foster fair, orderly, and efficient markets.”
The rule would require publicly traded companies to disclose Scope 3 greenhouse gas (GHG) emissions. To do business with public companies, small farms would be required to disclose a significant amount of climate-related information. Unlike large corporations, small farms do not have full-scale compliance departments. Imposing these additional reporting requirements could disqualify small, family-owned farms from doing business with companies which could lead to more consolidation in the agriculture industry.
The congressmen pointed out that farmers are already regulated by agencies at the local, state, and federal levels, and that there are currently multiple programs at the federal level to help farmers implement conservation practices.
According to the American Farm Bureau Federation (AFBF), the proposal would require public companies to report on Scope 3 emissions, which are the result of activities from assets not owned or controlled by a publicly traded company but contribute to its value chain. While farmers and ranchers would not be required to report directly to the SEC, they provide almost every raw product that goes into the food supply chain.
“The Securities and Exchange Commission plays an important role in protecting investors, but its reach has never extended to America’s farms. The bipartisan letter sent to the SEC recognizes the proposed rule’s overreach by an agency whose mission should be focused on Wall Street,” AFBF President Zippy Duvall said. “America’s families rely on farmers to put food on their table every day, and farmers are increasingly being asked to answer the growing call for nutrition from families around the globe. Higher costs, liabilities and privacy issues will all create obstacles to reaching those goals.”
The SEC is accepting public comments on the proposed rule until June 17. To read the rule click here. To make a comment, visit www.sec.gov/rules/proposed.shtml, scroll down to Release No. 33-11061 and click the link “submit comments on S7-10-22” in the section for that release.