Rep. Patrick McHenry, a Republican of North Carolina and rating member of the House Financial Services Committee, speaks during a hearing in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images
WASHINGTON — Top GOP lawmakers are pressing Securities and Exchange Commission Chair Gary Gensler on the agency’s proposal for climate-related disclosures for investors, in response to a letter released Wednesday.
Reps. Patrick McHenry, R-N.C., chairman of the House Financial Services Committee, Bill Huizenga, R-Mich., chairman of the panel’s Subcommittee on Oversight and Investigations and Tim Scott, R-S.C., rating member of the Senate Committee on Banking, Housing, and Urban Affairs, demanded detailed information from Gensler on the controversial “Enhancement and Standardization of Climate-Related Disclosures for Investors.”
“Congress created the SEC to perform the mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—to not advance progressive climate policies,” the letter addressed to Gensler states. “As a substitute of pursuing its clear statutory mission, the SEC, under your leadership, has chosen to flout the democratic process and pursue its progressive social agenda through the promulgation of this extraordinarily expansive climate disclosure rule.”
The request is an element of the GOP’s sustained scrutiny of the proposal to require publicly traded firms to speak in confidence to investors how their operations affect the climate and contribute to carbon emissions. Gensler recently announced that the agency is considering adjustments to the proposal, first introduced in March 2022, after pushback from investors.
Gensler told CNBC’s “Squawk Box” earlier this month that the proposal simply required a transparent climate transition plan from public firms.
“Some firms have targets (on) the right way to manage this,” he said. “And it was: if you’ve gotten something, just disclose it and form of describe it in order that the investing public has the fabric features of those plans in that regard.”
Republican lawmakers have balked at what they call the SEC’s overreach into business practices. Within the letter, they accuse Gensler of abusing “the rulemaking process” and said that “blatant partisan efforts to avoid the legislative process” are outside of the SEC’s oversight.
An SEC spokesperson said Gensler would reply to the GOP lawmakers directly.
Within the letter, the lawmakers requested answers to seven questions and accompanying documentation on the disclosure proposal, including minimization of First Amendment concerns, possible coordination with the White House and an inventory of any SEC employees who worked on the proposal, by March 8.
House Republicans have deployed their recent majority powers partly to focus on firms and agencies which have pushed to make social considerations a bigger piece of investing.
Earlier this month, McHenry formed a Republican working group on environmental, social and governance, or ESG, plans partly to focus on the rule disclosure. ESG platforms broadly apply to making an allowance for the environmental and social implications of an organization’s decisions, and never just its financial performance, as a part of investing decisions.
Many House Republicans have criticized ESG plans — but a few of them have received campaign contributions from the very financial firms they’re targeting.
