WASHINGTON (September 27, 2023) — The American Chemistry Council (ACC) is urging the Biden administration to scale back its proposed use of corporate climate disclosure mandates that interfere with and distort corporate governance and investor decision-making. A related SEC rulemaking is to be discussed today at a House Financial Services Committee hearing, “Oversight of the Securities and Exchange Commission.” The following statement may be attributed to ACC Senior Director for Energy, Climate, and Environment Charles Franklin.
“ACC and its members are committed to being partners and solution providers in supporting the nation’s path to a lower-emissions economy. Our companies apply innovation to help save energy and reduce emissions while advocating for policies to enable climate progress. ACC members and their value chain partners already report on material climate risks in their operations, and many participate in the development and use of voluntary third-party climate disclosure frameworks tailored to their industries and investor interests.
“The SEC lacks the expertise and legal authority to drive climate information policy. As we noted in our comments filed last year, the SEC’s mandate is limited and targeted, and the Commission’s efforts to tip the scales on corporate disclosure, governance and management decision-making is a prime example of the regulatory overreach our members are so concerned about.
“The SEC’s proposal fails the ‘materiality’ test that has long defined SEC’s mission and authority with respect to corporate disclosure mandates. It applies a ‘one size fits all’ standard rather than a flexible approach to climate risk reporting. These flaws undermine the SEC’s core function of helping investors make balanced and informed decisions based on material facts. Meanwhile, they make it more difficult for U.S. manufacturers to innovate and compete globally.
“The proposal’s heavy emphasis on Scope 3 emissions reporting is especially concerning. Our members provide chemistry products used in every sector of the economy and at every step of their respective value chains. Under the SEC’s vague and overbroad reporting and liability standards, public companies and their suppliers, customers and end users would be required to develop onerous and speculative estimates of the climate impacts of products across these vast value chains based on incomplete data or subjective assumptions – providing little value to investors.
“ACC members participate in a broad range of voluntary sustainability efforts tailored to specific industry sectors. We support an approach to climate-related disclosures that is company-specific, guided by materiality, and consistent with relevant third-party frameworks. We urge policymakers to develop and implement a process reflecting these core principles.”