Scott Joins Cramer, Hern, Colleagues in Bicameral Amicus Brief Against SEC’s Climate Disclosure Rule
Washington, D.C. – Today, Ranking Member Tim Scott (R-S.C.) joined fellow Senate Banking Committee member Senator Kevin Cramer (R-N.D.), Representative Kevin Hern (R-Okla.-01), and 32 additional Members of Congress in filing a bicameral amicus brief in Texas Alliance of Energy Producers, et al v. SEC, requesting the United States Court of Appeals for the Eighth Circuit vacate the agency’s climate disclosure rule. Ranking Member Scott has led the fight in Congress against the radical rule.
The brief states, “The SEC, as a securities regulator, is not empowered to impose sweeping climate-related regulations on publicly traded companies. Congress has demonstrated historical reluctance to pass broad climate legislation, particularly legislation that would dramatically impact federal securities law disclosure requirements. The SEC’s overreach into climate regulation violates the separation of powers and the major questions doctrine, warranting the rule’s invalidation.”
The brief continues, “Further highlighting the absence of authorization for the SEC’s Climate Rule is its conflict with fundamental tenets of federal securities law that have existed for decades. Specifically, the Climate Rule contravenes the principle of materiality, a cornerstone of federal securities law. […] The SEC’s historical stance and the Supreme Court’s interpretation affirm that immaterial information should not be subject to mandatory disclosure. By focusing on environmental impacts rather than financial materiality, the Climate Rule deviates from the SEC’s statutory mandate. Consequently, the Climate Rule’s disclosure requirements conflict with established federal securities law precepts and should be vacated.”
Click here to read the amicus brief.
BACKGROUND:
Under Chair Gensler, the SEC has pursued one of the most aggressive regulatory agendas in the agency’s history – with the agency on track to propose and finalize over 60 rules with limited public comment periods and inadequate cost-benefit analyses. Through rigorous congressional oversight, Ranking Member Scott has continued to push back on the widespread impact and confusion created by the agency’s proposed rules on our capital markets, American retirement savers, and businesses of all sizes.
In February of 2023, Ranking Member Scott, Chairman of the House Financial Services Committee, Patrick McHenry (R-N.C.-10), and Chairman of the Subcommittee on Oversight and Investigations, Bill Huizenga (R-Mich.-04), sent a letter to Chair Gary Gensler demanding records and other information related to the proposed climate disclosure rule, including responses to previous requests by numerous members of both the House and the Senate that Chair Gensler has failed to provide. The Republican leaders emphasized that the proposed rule exceeds the SEC’s mission, expertise, and authority and – if finalized in any form – will unnecessarily harm consumers, workers, and the U.S. economy.
Last June, Ranking Member Scott teamed up with the Chairman of the House Committee on Oversight and Accountability, Rep. James Comer (R-Ky.-01), to demand answers from the SEC about its role in facilitating the European Union’s (E.U.) progressive climate agenda, which could be imposed on American companies. Despite continued requests, the SEC has failed to produce documents around their involvement in the E.U.’s climate-related disclosure policies, as well as labor and social justice initiatives, that would harm a broad range of U.S. businesses and weaken U.S. capital markets. The SEC's actions and repeated stonewalling of congressional oversight are especially concerning given that the application of E.U. policies would circumvent U.S. regulatory and legal processes and allow foreign governments to dictate climate and economic policy to U.S. companies.
At a hearing in September, the Ranking Member pressed Chair Gensler about the agency’s aggressive rulemaking, lack of transparency, and unresponsiveness to congressional inquiries. Ranking Member Scott had called for the Chair to testify since February 2023. Following the hearing, Capitol Account highlighted Chair Gensler’s refusal to respond to congressional oversight requests from Senate Banking Committee minority members.
After the SEC’s announcement of the final climate disclosure rule, Ranking Member Scott declared his intent to use the Congressional Review Act (CRA) process to fight the rule and its implementation, calling it, “federal overreach at its worst.” In April, Ranking Member Scott introduced the CRA resolution to overturn the rule with the support of every Republican on the Senate Banking Committee, members across the Republican conference, and Senator Joe Manchin (I-W.Va.).
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