May. 31, 2022
Regarding the SEC proposed rule for Climate-Related Disclosures for Investors. The proposal will not bring consistency, comparability, and reliability to company climate disclosures. The proposal, however, will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable, and reliable company disclosures. We cannot make such fundamental changes to our disclosure regime without harming investors, the economy, and this agency. For that reason, I cannot support the proposal. Existing rules require companies to disclose material risks regardless of the source or cause of the risk. These existing requirements, like most of our disclosure mandates, are principles-based and thus elicit tailored information from companies. The proposal optimistically posits that mandatory disclosure of reams of climate information will ensure that all companies disclose comparable, consistent, and reliable climate information in their SEC filings. The proposal does not just demand information about the company making the disclosures; it also directs companies to speculate about the habits of their suppliers, customers, and employees; changing climate policies, regulations, and legislation; technological innovations and adaptations; and changing weather patterns. Wanting to bring clarity in an area where there has been a lot of confusion and greenwashing is understandable, but the release mistakenly assumes that quantification can generate clarity even when the required data are, in large part, highly unreliable. Requiring companies to put these faulty quantitative analyses in an official filing will further enhance their apparent reliability, while in fact leaving investors worse off, as Commission-mandated disclosures will lull them into thinking that they understand companies’ emissions better than they actually do. This proposal exceeds the Commission’s statutory limits. Congress gave us an important mission—protecting investors, facilitating capital formation, and fostering fair, orderly, and efficient markets—and granted us sufficient regulatory authority to achieve that mission. Effective execution of that mission forms the basis for healthy capital markets and, in turn, a healthy economy. Congress, however, did not give us plenary authority over the economy and did not authorize us to adopt rules that are not consistent with applicable constitutional limitations. This proposal steps outside our statutory limits by using the disclosure framework to achieve objectives that are not ours to pursue and by pursuing those objectives by means of disclosure mandates that may not comport with First Amendment limitations on compelled speech. This appears to be a power grab and a way to subvert our elected officials who represent us making these decisions. It also seems to be a way to push the false agenda of climate change. Imaging if companies had used Al Gore’s predictions as a basis for the reporting. I strongly disagree with this proposal!!! Sincerely, M.T. Elliott