More than 100 House members from both parties have criticized a proposed Securities and Exchange Commission rule requiring farmers to provide detailed climate data to public companies, as reported by Fox Business.
SEC’s proposed new rule would hurt small farms in the US
Chamber members say proposed ESG regulatory requirements for small farms are “unworkable” and could prevent farmers from working with public companies. The new regulations are called “Strengthening and Standardizing Climate-Related Information for Investors” and are part of a recent trend towards environmental, social and governance (ESG) investing. ESG investing involves investors evaluating criteria in addition to standard company performance data.
House unites to criticize proposed ESG rule
Members of the House criticizing new ESG rule total 118 and include both Democrats and Republicans. They wrote and signed a letter expressing their concerns, addressed to Gary Gensler, chairman of the Securities and Exchange Commission (SEC).
The letter said, “We strongly believe that this proposed rule, if enacted, would constitute a significant and unworkable regulatory burden, and a significant departure from the SEC’s mission to protect investors, facilitate capital formation and to promote fair, orderly and efficient market actions. It is beyond the SEC’s purview to regulate farmers and ranchers, which this rule would do by requiring public companies to disclose their Scope 3 greenhouse gas (GHG) emissions. state-owned companies, small farms would be required to disclose a significant amount of climate-related information. But unlike larger companies, small operations don’t have full-scale compliance departments. Imposing these additional reporting requirements could prevent small family farms from doing business with corporations, which could lead to more consolidation in the agricultural industry.
SEC requires climate-related disclosures
Fox Business reports that the SEC’s proposed rule requires filers to include a number of climate-related disclosures in their registration statements and periodic reports. These climate-related disclosures include information about climate-related risks that are considered “reasonably likely” to have a material impact on their business, results of operations or financial condition.
Gary Gensler spoke in March in support of the new rule, saying: “I am pleased to support today’s proposal because, if passed, it would provide investors with consistent, comparable and useful information to take their investment decisions.”
However, House members criticizing the new rule received support from the American Farm Bureau Federation. They believe the rule will force farmers and ranchers to track data they simply don’t have the resources for.
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