Corporate America seeks to end SEC climate rule

Washington’s biggest corporate lobby groups are trying to stop an SEC proposal that would require companies for the first time to disclose certain carbon emissions and climate change risks.

Three years after the Business Roundtable sought to portray its members as more environmentally friendly, the industry group is pushing the SEC to rewrite its March climate disclosure proposal. His opposition marks a break with tech companies Microsoft and Salesforce, which widely applaud the plans.

“We urge the SEC to issue a revised proposal,” said the Business Roundtable, chaired by General Motors’ Mary Barra. The SEC’s requirement that companies add disclosures to their audited financial statements is “unworkable,” she added.

Thousands of comments had been posted on the SEC’s website on Friday, the last day of the climate rule’s comment period. A final rule could be adopted by the end of the year at the earliest.

With Democratic-leaning commissioners in the majority in the five-member agency, the rule is expected to pass over objections from the business community. But it is almost certain to be challenged in court, either by companies or by Republicans, who have also opposed the SEC’s efforts.

In 2019, the Business Roundtable dropped its “shareholder primacy” mandate and most of the group’s members pledged to “protect the environment by adopting sustainable practices across our operations”, among other things.

The US Chamber of Commerce has also criticized the rule and called for it to be weakened. The House and Business Roundtable are two of the biggest lobby groups in Washington, spending $23.9 million so far this year, according to OpenSecrets.

But the SEC has not been completely abandoned by big business. Microsoft said it supports regular reporting of all large company emissions, including “scope 3” emissions, which include carbon from a company’s supply chain. These are typically the largest part of a company’s carbon footprint and the hardest to measure.

However, Microsoft has called on the SEC to drop financial disclosure requirements and instead report this information elsewhere in a company’s disclosure documents.

Similarly, Salesforce said disclosure of all emissions “is necessary to understand the short- and long-term risks associated with climate change.”

Major pension funds such as Calpers have backed the SEC’s proposed emissions disclosures. But some asset managers, such as State Street, have said scope 3 issuance “should remain voluntary.”

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