SEC Taking Heat on...Climate Change?
Recently the Securities and Exchange Commission (SEC) has come under fire for it’s handling of climate change disclosures with regard to SEC filings. At first blush one would assume very limited, if any, justification for considering the science of climate change in SEC filings…and this assumption would be logical.
So why is the SEC being pressured to require disclosures on climate science in filings by companies, that for the most, are not nor have been engaged in the field of climate science? The issue arose in 2010, when the SEC proposed “interpretive guidance” on existing disclosure requirements with regard to climate science. To be clear, the SEC did not issue a disclosure rule, simply “guidance” most likely the result of outside influence from extreme idealist and the government.
Given that most companies filing SEC disclosures are not climate scientist, and are not likely engaged in climate science research, the “guidance” went somewhat unheeded. In fact, the SEC has seemed to agree for the most part with reluctance to follow up on the issue.
In the two years following the release of the interpretive guidance, the SEC issued over 40 comment letters to companies addressing climate change disclosure. Yet that number dropped significantly with only three letters issue in 2012 and zero issued in 2013.
The most logical reason being that the SEC came to realize that such disclosures find little company in basic logic, and the agency’s time is better spent on its core mission, instead of serving the ideological musings of the extreme left. Just the same these outside pressures have reared their misguided head again, recently pushing an agency charged with holding expertise on securities laws to expand to climate science.
The SEC should take comfort in the fact that such a push for climate science based disclosures in securities filings sounds, as far outside the scope of SEC functions to most as it does the agency itself. One can only hope the SEC stands strong, sending a message to other federal agencies, that serving core policy goals, and not outside ideologies is the goal.
Photo credit: John M