June 25, 2021

Republican Attorneys General Urge SEC To Refrain From Requiring Additional Climate Change Disclosures

Bernard Nash

Cozen O'Connor

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Cozen O'Connor

A group of 16 Republican AGs, led by West Virginia AG Patrick Morrisey, sent a comment letter to the U.S. Securities and Exchange Commission (“SEC”) in response to the SEC’s call for input from the public about updating its rules governing climate change disclosures.
The letter argues that that SEC’s authority is limited to mandating required reporting that is necessary and appropriate for the protection of markets and investors, and that it does not possess broad powers to require public companies to make statements on any topic for which there may be investor demand. The letter also argues that mandating additional climate change disclosures may be unconstitutional because it attempts to regulate speech. According to the letter, in order to pass scrutiny under the First Amendment, such regulations must advance a constitutionally sufficient government interest, and be adequately related to advancing that end, but the purported public demand for increased climate change information is not a sufficient government interest to compel speech.
The letter urges the SEC not to expand its congressional mandate into unrelated social matters, especially because companies are already taking the lead on climate change disclosures voluntarily. The letter follows on the heels of a separate letter, as reported last week, by 12 Democratic urging the SEC to require U.S. companies to disclose financial risks related to by climate change.

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