Unravelling the SEC’s Latest Demonstration of Overreach: SEC Mission Creep

In March of this year, the Securities and Exchange Commission (SEC) proposed a new rule that would require companies to significantly increase their reporting on climate risk to investors. This added reporting requirement would mandate that companies include certain and increasingly detailed climate-related financial data in their public disclosure filings.  Most notably, direct and indirect greenhouse gas emissions (GHG), which are nearly impossible to track would be required to be disclosed. To make matters worse, the proposed rule strays severely from the SEC’s mission by inserting itself unnecessarily into matters of climate change policy. A move that will cost big and small companies billions of dollars a year to comply with. 

The reality is most companies can’t afford this proposed regulation’s newly added costs. Plus, companies are already required to disclose their climate impacts. There is no reason why  the SEC should continue to burden the nation’s economy and businesses when the country is facing the highest prices in 40 years.  The Taxpayers Protection Alliance “SEC Mission Creep” educates the public about this new attempt to burden businesses.

 “SEC Mission Creep” highlights the clear overreach of the SEC beyond its congressional mandate with its proposed climate disclosure rule. The goal is to shed light on the SEC’s overstep and advocate against the passage of such a complex rule that would do more harm than good.

Currently, the SEC has continued to creep further into a realm in which it has no authority by regulating issues such as climate risk that are outside of its scope. Aside from its proposed legislation earlier this year, the SEC has now found a way to attempt to regulate environment, social, and governance (ESG) investing. They want to require enhanced ESG disclosures by investment companies forcing ESG investments that consider environmental factors to disclose the greenhouse gas emissions of a portfolio. Attempting to regulate financial products is not within the SEC’s scope and should not be, in any capacity.

If the SEC’s proposed rule passes legislation, the retirement savings of millions of people could be at risk. This move would affect everyday investors (including pension holders) who will ultimately bear the cost of these regulations in the form of lower dividends and returns. Additionally, individual investors will be faced with pages of information irrelevant to the financial performance of investments, unnecessarily complicating their investment decisions.

The SEC’s continual creep into policy fields that don’t concern them needs to continue to be brought to light. It is important to address the overstep that the SEC is carrying out and ensure that companies, investors, and the fragile economy is protected.

Find more information on SEC Mission Creep here.