Under increasing pressure to enact the Biden Administration’s regulatory agenda before the midterm elections, the Securities and Exchange Commission nevertheless announced Monday that it extended the public comment period on the proposed rulemaking for climate-related disclosures by U.S companies.
“The SEC’s decision to extend the comment deadlines on its package of climate rule proposals is not surprising,”
Thomas Gorman
The ambitious proposal, introduced on March 21, would require public companies to disclose climate change risks and greenhouse gas emissions in their official filings, such as annual and semi-annual reports.
The public comment period for the proposed rulemaking, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” will now end on June 17, 2022.
“Today, the Commission acted to provide the public with additional time to comment on three proposed rulemakings that have drawn significant interest from a wide breadth of investors, issuers, market participants, and other stakeholders,” SEC Chair Gary Gensler said in a statement.
“The SEC benefits greatly from hearing from the public on proposed regulatory changes,” he continued. “Commenters with diverse views have noted that they would benefit from additional time to review these three proposals, and I’m pleased that the public will have additional time to provide thoughtful feedback.”
Thomas Gorman, a partner in the D.C. office of Dorsey & Whitney and author of the “SEC Actions Blog,” said that although controversial and possibly challenged, Gorman believes the SEC will ultimately uphold the rules.
“The SEC’s decision to extend the comment deadlines on its package of climate rule proposals is not surprising,” Gorman said. “Those proposed rules, while painted as being the product of investor demand, are in fact, quite controversial.
He added that the SEC typically focuses on financial and reporting issues related to an issuer’s products and/or services.
“Here, the agency is asking for the disclosure of information regarding climate and its impact on the business, “he concluded. “That appears to be quite different from its more traditional role, and many believe it is outside the scope of the SEC’s authority.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
