Bill of the Month — February 2023: Protect Farms from the SEC Act

The Taxpayers Protection Alliance’s (TPA) Bill of the Month for February 2023 is the Protect Farmers from the SEC Act, introduced by Sens. John Boozman (R-Ar.) and Mike Braun (R-Ind.). This legislation would prohibit the U.S. Securities and Exchange Commission (SEC) from requiring agriculture-sector registrants to report the Scope 3 greenhouse gas (GHG) emissions continued in the commission’s climate disclosure proposal. 

Background:

Following President Biden’s May 2021 Executive Order on Climate-Related Financial Risk (E.O. 14030), the SEC announced in March 2022 that it would propose a rule entitled The Enhancement and Standardization of Climate-Related Disclosures for Investors” (87 FR 21334). This proposed rule would subject publicly traded companies to new reporting requirements, including the addition of reporting mandates on GHG emissions up and down the supply chain of their products, known as Scope 3 emissions. 

The SEC estimates that this proposed rule will cost U.S. companies $10.2 billion annually. Every year, each publicly traded American businesses (from small farms to Wall Street giants) would be mandated to incur hundreds of thousands of dollars in additional costs to comply. Moreover, the rule is wholly immaterial to the SEC’s congressionally authorized mandate and stands to run afoul of the Major Questions Doctrine, as precedented under West Virginia v. EPA.

In the agriculture industry, Scope 3 reporting requirements would be especially cumbersome. Farms would have to track indirect emissions from everyone along their supply chain, including its truck drivers, food processors, grocery stores and consumers. The overwhelming cost of such a mandate from the SEC would likely lead to the closure of many small and mid-sized farms.

Protect Farmers from the SEC Act:

This legislation would amend the Securities Exchange Act of 1934 to prevent the SEC from requiring agriculture producers, manufacturers, or harvesters to report Scope 3 emissions. Scope 3 reporting requirements would equate to a further tax on American farmers already struggling from supply chain issues and the impacts of inflation. 

The Protect Farmers from the SEC Act would protect the agricultural sector from the commission’s perverse policies. 

It is for these reasons, among others, that TPA is proud to make the Protect Farmers from the SEC Act, introduced by Sens. Boozman and Braun, its Bill of the Month for February 2023.