House Financial Services Committee Holds Hearing on SEC’s Climate Disclosure Rule, Agency Overreach

Earlier in April, the House Financial Services Committee held a hearing entitled “Beyond Scope: How the SEC’s Climate Rule Threatens American Markets.” The hearing also considered a proposed House Resolution expressing congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Securities and Exchange Commission relating to “The Enhancement and Standardization of Climate- Related Disclosures for Investors.” During the hearing, which heard testimony from several witnesses including former acting SEC Chair Elad Roisman, Committee Chairman Patrick McHenry (R-NC) stated the Commission’s final climate rule exceeds the statutory authority because Congress “never authorized the Commission to be a climate regulator.” Many of the Republicans on the Committee highlighted concerns with agency overreach, cost of implementation, the lack of firm definitions for key terms in the rule, and the rule’s impact on competition. Some Members noted that the materiality standard should already cover key climate disclosures by publicly listed companies. Ranking Member Maxine Waters (D-CA) expressed support for the final rule but also noted she wished it went further.

The House Financial Services Subcommittee on Capital Markets held a similar hearing in March, with Republican members blasting the rule. Chairman Ann Wagner (R-MO) stated “today, we will hear why our proposed slate of common-sense reforms is necessary to prevent an activist agency from accomplishing political objectives—sometimes in violation of the law.” That hearing also examined several bills and draft legislative measures, ranging from requirements for the Commission to better analysis the costs and benefits of rulemakings, require a semi-annual report to the Full Committee from the Commission’s Chair, and establish minimum comment period lengths for proposed rules, among others. These proposed bills will have an uphill battle during an election year and with Democrats holding the Senate and White House.

Click here to watch an archived video of the April 10 full Committee hearing on climate disclosure.
Click here to watch an archived video of the Capital Markets Subcommittee hearing on agency overreach.