WASHINGTON — Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing on the Securities and Exchange Commission’s (SEC) disastrous climate risk disclosure final rule. Republicans are examining the numerous consequences of this fatally flawed rule which exceeds the agency’s authority, threatens our economy, and overwhelms investors with non-economic information.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“We’re here to discuss the SEC’s recently finalized climate disclosure rule, which will be disastrous for American markets, job creators, workers, and investors. It’s costly, complex, and against the public good.
“The final rule is not a so-called compromise. It is yet another attempt by the Biden Administration to force its climate regulatory policy agenda on the public through financial regulation.
“I want to be clear: climate change is real. Human activity contributes to it. It is a significant challenge that America and the world is grappling with—and will continue to for decades to come.
“But this hearing is not about climate change. It is about the proper role of our securities regulator. So, when you hear Democrats accuse Republicans of being 'anti-science,' they are proving our point that this rule is about the left’s climate-policy agenda—not simply standardizing disclosures.
“The SEC is not a climate regulator. Congress has never authorized it to act as one. The final rule clearly exceeds the Commission’s statutory mandate.
“This is par for the course with the current SEC. Whether it’s inadequate public engagement, failing to comply with the Administrative Procedure Act, attacking innovation, or issuing rules that exceed its authority—Chair Gensler’s SEC clearly thinks it’s above the law.
“It’s not just Republicans sounding the alarm. In the past 12 months:
“A federal judge imposed sanctions on the SEC for its ‘gross abuse of power’ in the DEBT Box case.
“The judge in the Ripple case criticized the Commission’s lack of 'faithful allegiance to the law.'
“And the judge in the Grayscale case found the SEC acted in a 'arbitrary and capricious' manner.
“It’s clear Chair Gensler’s SEC is tarnishing the reputation of the institution.
“The final climate disclosure rule is yet another glaring example of the agency’s overreach.
“First, the rule will significantly harm our markets and job creators. It will force public companies to decipher an 886-page rule—increasing costs for a public company by 21 percent according to the SEC’s own estimates. Many, including Commissioner Peirce, have noted this estimate is likely on the low end.
“Such a massive increase in compliance costs will impede firms from going or staying public. Oddly enough, the largest companies often attacked by the left are the only ones who might be able to afford these enormous costs.
“Second, the rule will crush everyday investors. Fewer public companies mean fewer investment options for families to save and build wealth.
“Everyday investors will also be overwhelmed—not informed—by the amount of granular, complex, non-economic information required by the rule.
“Contrary to Democrats’ claims, it’s non-economic actors and progressive stakeholders who are demanding these climate regulations—not everyday investors.
“Finally, the climate rule will hurt American workers who are already struggling to make ends meet under Bidenomics. Increased costs will force companies to hire fewer employees, invest in fewer job-creating opportunities, and pass higher costs on to consumers.
“It’s clear the SEC’s final climate disclosure rule would be catastrophic for our markets and American competitiveness.
“The Commission’s stay of the rule is not eough. Instead, I urge Chair Gensler to abandon this regulatory power grab and return his focus to the statutory role of the SEC: protecting investors; maintaining fair, orderly and efficient markets; and facilitating capital formation. If he doesn’t, Republicans will be forced to act.”
