Gary Gensler Stages a Climate Coup
The SEC Chairman does the bidding of BlackRock and the left.
Russia’s assault on Ukraine is changing the world—except Washington, D.C., where the Biden Administration is continuing its war on fossil fuels as if energy security doesn’t matter.
The latest strike came Monday when the Securities and Exchange Commission voted 3-1 to advance a proposed rule requiring public companies to disclose climate risks. The proposal, which was issued with only Democratic votes, is contrary to SEC history, securities law, and sound regulatory practice.
Public companies are already required to report “material” events and risks, which the SEC defines as information a reasonable person would consider important. SEC Chairman Gary Gensler is redefining materiality as whatever BlackRock and progressive investors want to know. The 510-page proposal will require the public disclosure of risks to physical assets from climate change as well as from government anti-carbon policies.
Companies will have to report greenhouse-gas emissions generated directly by their operations (e.g., refining oil) as well as from their energy consumption. Companies will also have to report what are called Scope 3 emissions from their supply chains and customers if they are material, which will be in the eyes of progressive investors.
For example, Exxon Mobil would have to report its direct emissions as well as any from fossil fuels burned to generate the electricity it uses. It may have to quantify emissions from the combustion of its products, the tankers that deliver them, and the manufacturing of its rigs and plastic products when they degrade.
Scope 3 emissions have no clear definition. The agency says it has “not proposed a bright-line quantitative threshold for the materiality determination” for Scope 3 emissions because this “would depend on the particular facts and circumstances, making it difficult to establish a ‘one size fits all’ standard.”
Yet the overall rule would impose a one-size-fits-all regulation on thousands of public companies. A property and casualty insurer’s exposure to flood or wildfire zones is probably material. Ditto direct emissions of fossil-fuel producers that operate in jurisdictions with carbon taxes or cap-and-trade systems. But carbon emissions aren’t relevant to the financial performance of most public companies.
The SEC claims to have “broad authority to promulgate disclosure requirements that are ‘necessary or appropriate in the public interest or for the protection of investors.’” But neither securities law nor the Constitution lets the SEC mandate whatever public disclosures some investors or politicians want.
https://www.wsj.com/articles/gary-gensler-stages-a-climate-coup-securities-and-exchange-commission-blackrock-11647899043
Fffffuuuuucckkkk the SEC