The SEC describes its disclosure rule as necessary to address investors’ demands for transparency about climate change risks. While that sounds simple, the sheer size of this broad rule is anything but. It could reorient the entire financial system into a driver of climate change policy rather than a means to promote fair financial returns to workers, retirees, and other shareholders.
Some have argued it’s designed to deny financing to the American oil and natural gas industry just at a time when more production is needed to bring down energy prices.
In fact, the rule is so complex it runs 506 pages, contains 1,068 footnotes, references 194 dense academic and governmental reports, imposes a $10.235 billion cost on society, and seeks answers to 196 discrete questions.
The sheer volume of information would overwhelm investors, obscure transparency, and divert excessive resources away from productive, revenue-generating activities into bean-counting overhead.
It would require corporations to report greenhouse gas (GHG) emissions of everything related to the production, end-use consumption, and disposal of their products. Companies would have to provide up to 232 discrete data points, several of which would themselves require the collection of thousands of data points.
The extension letter requests that SEC provide a substantial comment period for the climate change disclosure rule given the size, scope, complexity, and ramifications of the rule. The 39 days allotted for comment since the proposed rule – currently due May 20 – that was published in the Federal Register are woefully inadequate for the magnitude of this rule.