Industry groups speak out as SEC files final climate-related risk disclosure rule

The US Securities and Exchange Commission (SEC) released its final climate-related risk disclosure rule, one that was first proposed in March 2022. In response, the SEC received over 15,000 comment letters, the most ever received for any proposed rule in the agency’s history. The final rule will require reporting to start on a sliding scale dependent on the filer type and data, beginning in 2025 and going through 2033.

Among the energy industry advocacy groups that have responded are the American Petroleum Institute (API) and the Energy Workforce and Technology Council, with each group voicing concerns over the legality and scope of the rule.

In a statement from API, Senior VP and Chief Counsel Ryan Meyers said, “Despite some changes by the Commission, this flawed rule will still subject investors to countless billions in additional costs without meaningfully advancing a dialogue on climate that has been occurring for many years between companies and their shareholders. The Commission should have reproposed the rule for further input in light of its statutory obligation to protect investors, maintain well-functioning markets and ensure capital formation.”

API submitted comments on the SEC’s proposed rulemaking in June 2022, reiterating its support of timely and accurate reporting of greenhouse gas emissions from all emitting sectors. However, API also raised concerns that the proposed rule would overwhelm investors with information they do not seek while imposing historic costs on companies and shareholders.

The Energy Workforce and Technology Council released statements from Presidents Tim Tarpley and Molly Determan.

“While the SEC did make some positive changes over the original proposed rule such as removing the Scope 3 reporting requirement and improving the materiality standard, there are still significant concerns regarding the legality and scope of this rule,” said Mr Tarpley. “The ruling will put additional costs on reporting and data collection for public companies without necessarily leading to a reduction in emissions. Overall, we believe emissions reporting should be voluntary and driven by market forces, not a government mandate.”

Ms Determan echoed those sentiments while also stressing the need for clear metrics. “Make no mistake, the energy industry remains committed to reducing emissions,” she said. “The energy services sector is at the forefront of developing new technologies and deploying existing alternatives to reduce emissions and power the globe more sustainably. However, the industry needs clear metrics that allow us to implement achievable goals rather than bureaucratic red tape that does little to impact climate outcomes”