SEC climate disclosure rule faces opposition at House hearing

The House of Representatives’ Financial Services Committee is holding a hearing today (January 18) on oversight of the SEC’s proposed climate rule, as opposition to climate disclosures grows in the US.

The future of mandatory climate disclosures in the United States appears uncertain: budget cuts may delay the implementation of California’s landmark climate reporting law, while at the federal level, the long-awaited rule drafted by the Securities and Exchange Commission (SEC) is facing increasing opposition.

The House Financial Services Committee’s Subcommittee on Oversight and Investigations, which oversees the banking system, housing, insurance, and securities and exchanges, is holding a hearing today entitled ‘Oversight of the SEC’s Proposed Climate Disclosure Rule: A Future of Legal Hurdles’. 

Almost all the witnesses listed to speak at the hearing oppose the climate rule: they include the Vice President of the National Association of Manufacturers Charles Crain, Mayer Brown Special Counsel Lawrence Cunningham, and Schultz Fruitridge Farms Vice President Bill Schultz.

Scope 3 seen as beyond the SEC’s authority

The move is seen by supporters of the rule (speaking anonymously to CSO Futures) as a “sham hearing” and the latest attempt to block a climate disclosure rule considered too costly for businesses. 

In particular, many organisations in the US oppose any Scope 3 emissions disclosure requirements, and argue that it would technically extend the SEC’s authority to private companies, since public firms would have to ask them for emissions reports to comply with the rule.

Speaking at the US Chamber of Commerce ( last October, SEC Chair Gary Gensler agreed that private companies “shouldn’t get caught up” in the rule, but said investors saw Scope 3 reporting as necessary to assess transition risk.

Attempts to discredit SEC rulemaking process

Efforts to discredit the SEC over the climate disclosure rule have accelerated in recent months, with conservative advocacy groups and media accusing the Commission of coordinating the rule with organisations that could benefit financially from its implementation – including climate management software Persefoni (which did not respond to CSO Futures’ request for comment on this story) and non-profit Ceres.

The SEC justified the collaboration with these organisations as a normal part of transparent rulemaking, seeking input from "a wide array of market participants".

The hearing itself is unlikely to threaten the publication of the final rule by the SEC: according to the US Congress’ website, hearings are simply “a forum at which committee members and the public can hear about the strengths and weaknesses of a proposal from selected parties”, but they do not necessarily result in further action from committees. Additionally, subcommittees like the one on oversight and investigations holding today’s hearing cannot move legislation forward: only full committees may do so.

A 2022 survey by non-profit JUST Capital found that 87% of Americans support mandatory climate disclosures disclosure.