Input Stories

The Securities and Exchange Commission moved to address a longtime NAM priority last week: rescinding overly burdensome climate risk disclosure rules (SEC.gov).

What’s going on: On May 29, the SEC issued a draft rescission of the previous administration’s 2024 requirement—stayed by the SEC amid legal challenges—that publicly traded companies disclose their greenhouse gas emissions and other climate-related information in registration statements and annual reports.

• The rules “exceed the scope of the agency’s statutory authority,” the SEC said on Friday.

Why it’s happening: Even if the rules came under SEC purview, the agency continued, they should be rescinded because they:

• Are unnecessary and inconsistent with a disclosure approach “that best serves the interests of [companies] and investors”;
• Go beyond the policy concerns of the federal securities laws;
• Impose significant, unjustified costs on public companies and their shareholders; and
• Are at odds with the SEC’s “policy objectives of facilitating capital formation and promoting public company status.”

The NAM’s longtime role: The NAM has argued against the proposed climate mandate for years.

• In 2022, the NAM submitted a 52-page comment letter that detailed members’ objections, telling the SEC that the draft rulemaking was “so prescriptive in its approach that it will necessitate a breadth and granularity of data collection, analysis, tracking, assurance and disclosure far out of step with current business practices and thus will substantially increase compliance costs and legal risks for public companies—despite limited investor benefit given the financial immateriality of many of the disclosures.”
• In 2024, the NAM filed an amicus brief that argued that the SEC had exceeded its authority by trying to prescribe climate policy.
• The NAM also testified before Congress, warning that the rulemaking “would impose tremendous costs on manufacturers of all sizes—while overwhelming investors with immaterial information.” 

What’s next: The public comment period of the SEC’s May 29 rescission proposal will remain open for 60 days, and the NAM intends to submit comments in favor of the move. 

• Have suggestions for the NAM’s letter on the climate rules? Email NAM Senior Director of Corporate Finance Policy Ted Allen by June 29.