A trio of Republican congressmen sent U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler a letter Wednesday, demanding to know how the agency developed new climate rules and the extent to which non-governmental organizations (NGO) and other members of the federal government may have influenced the policy.
The SEC’s proposed rules mandating companies disclose climate-related financial data alongside traditional data “exceeds the SEC’s mission, expertise and authority,” Reps. Patrick McHenry of North Carolina, Bill Huizenga of Michigan and Sen. Tim Scott of South Carolina allege in the letter. The letter asks for Gensler to provide estimates for the potential costs of the new rules, a list of all current and former employees who have worked on the rules, and whether the SEC coordinated with outside agencies and NGOs during the rule-making process.
SEC Chair Gary Gensler met with representatives of the Task Force on Climate-Related Financial Disclosures (TCFD) in May 2021, roughly nine months before the rules were initially proposed in March 2022, according to documents obtained by the non-profit Energy Policy Advocates through a Freedom of Information Act Request. Members of the TCFD — which is chaired by major Democratic donor and finance mogul Michael Bloomberg and is not considered to be an NGO — appeared to have close relationships with officials at the U.S. Treasury Department, and promoted policies that required the companies disclose climate-related financial data, according to a Daily Caller News Foundation review of additional documents.
Under @GaryGensler’s watch @secgov continues to push a partisan agenda that it has no mandate or authority to pursue. As promised @SenatorTimScott, @patrickMcHenry, & I are conducting oversight to hold these Biden Bureaucrats accountable and standing up for small business! pic.twitter.com/FFa0GcC2c7
— Rep. Bill Huizenga (@RepHuizenga) February 22, 2023
The proposed rules reportedly generated significant pushback from business interests — more than SEC officials anticipated — who argued that the new rules would be expensive to implement, open to interpretation, and potentially lead to inaccurate reporting of costs. The SEC is reportedly considering scaling back the rules, but the finalized version rules are nonetheless expected to face legal challenges.
“Under your leadership, the SEC has shifted away from its principles-based disclosure regime to a partisan, activist, and prescriptive approach,” the congressmen wrote. “This includes implementing a climate agenda that is outside the scope of its mission and which will have significant economic and political consequences for the Nation and our capital markets.”
The congressmen hope that the letter will help uncover the details of the “bureaucratic mission creep” at the SEC, Huizenga communications director Brian Patrick told the DCNF.
“The SEC has no expertise and no authority in this area yet they proposed an unworkable rule that will negatively impact family farms, businesses large and small, as well as retail investors saving for their future,” Patrick wrote to the DCNF. “This will have a HUGE impact on the entire economy with NO input by those elected to represent citizens.”
Chair Gensler has opted not to speak through the media, and will instead contact the congressmen directly, an SEC spokesperson told the DCNF.
The offices of Sen. Scott and Rep. McCarthy did not immediately respond to a DCNF request for comment.
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