NAM to SEC: Rescind Final 2024 Climate Rule
A Securities and Exchange Commission disclosure rule approved under the previous administration would be costly for manufacturers and should be rescinded, the NAM told the agency recently.
What’s going on: In June, the SEC proposed the repeal of a highly prescriptive 2024 rule that would require publicly traded companies to disclose their greenhouse gas emissions, their management of climate-related risks, the financial impact of weather events and other climate-related information. That 885-page rule was challenged in court by business groups and Republican-led states and never took effect.
- When the rule was first proposed in 2022, the NAM cautioned against finalization, warning that the substantial compliance costs, including for reporting Scope 3 supply chain emissions, would far exceed the benefits for investors.
Why it’s important: Although the SEC later dropped the Scope 3 mandate, that revised rule still would impose at least $4.9 billion in annual compliance costs on U.S. companies overall if the rulemaking were to take effect. As the NAM explained, the 2024 rule:
- “Is not necessary, as [most] manufacturers already are providing material climate-related information to their shareholders.”
- Carries significant costs that “would far exceed any informational benefits for a limited number of investors.”
- Exceeds the SEC’s statutory authority, as it “appears [to be] an attempt to make substantive climate policy—something the agency lacks the power to accomplish.”
The final say: The current SEC’s rescission proposal “would broadly benefit market efficiency, competition and capital formation,” NAM Vice President of Domestic Policy Jake Kuhns and NAM Senior Director of Corporate Finance Policy Ted Allen said.
