Capito, Hern, 33 colleagues urge court to vacate SEC’s climate rule

U.S. Sen. Shelley Moore Capito (R-WV) and U.S. Rep. Kevin Hern (R-OK) joined 33 of their fellow lawmakers in seeking to quash a climate disclosure rule adopted in March by the Securities and Exchange Commission (SEC) that requires publicly traded companies to disclose their greenhouse gas (GHG) emissions data. 

In a bicameral amicus brief the congressional members filed in Texas Alliance of Energy Producers, et al v. SEC, they requested that the U.S. Court of Appeals for the Eighth Circuit vacate the agency’s climate disclosure rule. U.S. Sen. Kevin Cramer (R-ND) led the U.S. Senate’s effort, while Rep. Hern headed the effort in the U.S. House of Representatives.

According to their brief, the SEC’s climate rule, “The Enhancement and Standardization of Climate-Related Disclosures for Investors” Securities Act Release No. 33-11275, would greatly expand the burdens placed on publicly traded companies in ways that will ultimately harm investors in those companies. 

“As elected members of Congress, Amici have strong institutional interests in protecting Congress’s power to enact legislation governing our nation, including laws addressing securities markets and climate policy,” according to the lawmakers.

They also stated that the SEC, as a securities regulator, is not empowered to impose sweeping climate-related regulations on publicly traded companies.

“Congress has demonstrated historical reluctance to pass broad climate legislation, particularly legislation that would dramatically impact federal securities law disclosure requirements,” the brief says. “The SEC’s overreach into climate regulation violates the separation of powers and the major questions doctrine, warranting the rule’s invalidation.”

Additionally, the SEC’s climate rule conflicts with fundamental tenets of federal securities law that have existed for decades, say the lawmakers.

“By focusing on environmental impacts rather than financial materiality, the climate rule deviates from the SEC’s statutory mandate,” states the brief. “Consequently, the climate rule’s disclosure requirements conflict with established federal securities law precepts and should be vacated.”

Among the lawmakers who joined Sen. Capito and Rep. Hern in signing on to the amicus brief were U.S. Sens. Marsha Blackburn (R-TN), Bill Cassidy (R-LA), Steve Daines (R-MT), and Mike Rounds (R-SD), as well as U.S. Reps. Kelly Armstrong (R-ND), Dan Newhouse (R-WA), August Pfluger (R-TX), and Ann Wagner (R-MO).