House Republicans on Wednesday repeatedly challenged the authority of the Securities and Exchange Commission to require public companies to disclose the greenhouse gas emissions in their supply chains, a proposal that has drawn strong opposition from farm groups.
SEC Chairman Gary Gensler stressed that the proposal hasn’t been finalized, but insisted to GOP members of the House Financial Services Appropriations Subcommittee that the plan relied on the agency’s longtime legal authority to ensure that information provided to investors is “full, fair and truthful.”
He said up to 1,000 public companies were already providing information on their greenhouse gas emissions.
“We’re trying to bring consistency and comparability to those disclosures,” he said. The proposal, he said at another point in the hearing, is also intended “to tamp down greenwashing” by corporations.
Gensler repeatedly said the proposed requirements, issued more than a year ago, could be modified. He acknowledged that the commission had received significant pushback on required disclosures of emissions in a company’s supply chain, known as Scope 3 emissions.
“That discussion is an ongoing one by the staff and the commissioners at the SEC because we did get a lot of feedback on that,” Gensler said.
Rep. Ashley Hinson, R-Iowa, called the proposal a “true weaponization” of the agency.
“It’s time to reel it in,” she said of the plan. She said large corporations “have teams of attorneys that can help them comply. Iowa farmers don’t have that.”
A coalition of farm groups told the SEC the proposal would be “wildly burdensome and expensive” for farmers and potentially put small and mid-size farmers out of business.
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Rep. Michael Cloud, R-Texas, noted that a bill that passed the House in the last Congress to mandate that companies disclose greenhouse gas emissions ultimately died in the Senate. “Therefore there is no authority to collect this kind of information,” he told Gensler.
Former House Democratic leader Steny Hoyer, the top Democrat on the subcommittee, said as the hearing wore on that he wanted to look into the SEC proposal further.
“I want to understand my colleagues’ real concern to see whether I share their view that it may have an effect on small enterprises, which do not have the ability to respond to that or … may be implicated by association” with other companies, he said.
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