April 17, 2024

Scott Leads Effort to Roll Back SEC’s Climate Disclosure Rule

Washington, D.C. – Ranking Member Tim Scott (R-S.C.) today introduced a Congressional Review Act (CRA) resolution to overturn the Securities and Exchange Commission’s (SEC) radical climate disclosure rule which would bury public companies in paperwork, raise costs for consumers, and stifle economic opportunity.

Every Republican on the Senate Banking Committee, including Senators Mike Crapo (R-Idaho), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), John Kennedy (R-La.), Bill Hagerty (R-Tenn.), Cynthia Lummis (R-Wyo.), J.D. Vance (R-Ohio), Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), and Steve Daines (R-Mont.) joined the Ranking Member’s resolution. Senators Mitch McConnell (R-Ky.), Chuck Grassley (R-Iowa), John Cornyn (R-Texas), John Thune (R-S.D.), John Barrasso (R-Wyo.), Jim Risch (R-Idaho), Joe Manchin (D-W.Va.), Jerry Moran (R-Kan.), John Boozman (R-Ark.), John Hoeven (R-N.D.), Marco Rubio (R-Fla.), Ron Johnson (R-Wis.), Ted Cruz (R-Texas), Deb Fischer (R-Neb.), Shelley Moore Capito (R-W.Va.), Bill Cassidy (R-La.), James Lankford (R-Okla.), Tom Cotton (R-Ark.), Dan Sullivan (R-Alaska), Cindy Hyde-Smith (R-Miss.), Mike Braun (R-Ind.), Rick Scott (R-Fla.), Tommy Tuberville (R-Ala.), Ted Budd (R-N.C.), and Pete Ricketts (R-Neb.) also signed onto the CRA.

“The SEC’s final climate disclosure rule threatens economic opportunity across the country, and it must be overturned. Over and over again, SEC Chair Gensler has disregarded the real-world impacts of his aggressive regulatory agenda in his dogged pursuit of left-wing political priorities. This rule is no exception. The SEC’s mission is to regulate our capital markets and ensure all Americans can safely share in their economic success – not to force a partisan climate agenda on American businesses. This rule is federal overreach at its worst, and the SEC should stay in its lane,” said Ranking Member Scott.

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 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 process to fight the rule and its implementation, calling it, “federal overreach at its worst.”

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