Sen. Joe Manchin said Monday that he is “deeply concerned” about the new climate disclosures proposed by the Securities and Exchange Commission.
In a letter to the SEC, the West Virginia Democrat said that the proposals go against the regulatory body’s stated mission, and that such policies will add “undue burdens on companies,” especially in the fossil fuel industry.
“The most concerning piece of the proposed rule is what appears to be the targeting of our nation’s fossil fuel companies,” he wrote.
The SEC announced the proposed rules around climate disclosures on March 21. Companies would be required to report on greenhouse gas emissions, climate-related targets and goals, as well as how climate risks impact their business.
Manchin said the proposed changes are unnecessary for several reasons, including that nearly two-thirds of companies in the Russell 1000 index release sustainability reports.
But these reports differ widely across companies. At present, companies can largely choose what information is reported and how it’s reported. Climate data can also be challenging to collect and verify.
“To suggest that any and all public companies have the resources and capabilities to capture this data is shortsighted,” the letter reads. Manchin said forcing such requirements on companies could impose “undue financial hardships” and also erode public trust.
Manchin is among the most conservative Democrats in the Senate and has opposed key policy proposals favored by Democrats, including President Joe Biden‘s Bill Back Better Bill. He has financial ties to the coal industry, and receives regular donations from fossil fuel executives, including Ryan Lance of ConocoPhillips and Vicki Hollub of Occidental.
Manchin said the SEC’s proposed rules “seemingly politicize a process aimed at assessing the financial health and compliance of a public company.” He pointed specifically to requirements around disclosure of Scope 3 emissions,. which are indirect emissions from a company’s supply chain. These emissions can be especially difficult to track.
The SEC’s proposed rule says Scope 3 emissions must be tracked “if material.”
Manchin noted some companies are already required to provide data to the Environmental Protection Agency, for example, so adding more data reporting requirements is unnecessary work. He said ultimately it will be “timely and costly” for public companies, and could also confuse investors.
“Ultimately, I am interested in the implementation of rules that are rational and ensure that the system is fair. Reassessing the responsibilities of our nation’s energy companies within these disclosures is a critical component to reaching that fairness,” Manchin concluded.
The SEC’s new rule is currently in a 60-day public comment period.
— CNBC’s Thomas Franck contributed reporting.
