Tim Scott to introduce measure to overturn controversial SEC climate rule
'This rule is federal overreach at its worst, and the SEC should stay in its lane,' Scott said
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SEC commissioner Hester Peirce discusses the agency's regulation plan for US companies on 'Cavuto: Coast to Coast.'
FIRST ON FOX: Senate Banking Committee Ranking Member Tim Scott, R-S.C., will introduce a measure in the upper chamber on Wednesday attempting to overturn a controversial Securities and Exchange Commission (SEC) climate rule that has drawn outrage from Republicans — and even some Democrats — FOX Business has learned.
The rule, adopted last month by the SEC, requires public companies to "enhance and standardize climate-related disclosures" in an effort to inform investors "about the financial effects of climate-related risks on a registrant’s operations and how it manages those risks," according to the SEC.
The climate rule was paused earlier this month, with the SEC issuing a stay on the rule while it defends itself from dual right- and left-wing litigation.
In announcing the new rule, SEC Chairman Gary Gensler said, "Investors get to decide which risks they want to take so long as companies raising money from the public make what President Franklin Roosevelt called ‘complete and truthful disclosure.'"
SEC Chairman Gary Gensler participates in a meeting of the Financial Stability Oversight Council at the U.S. Treasury in Washington, D.C., on July 28, 2023. (Kevin Dietsch/Getty Images / Getty Images)
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"These final rules build on past requirements by mandating material climate risk disclosures by public companies and in public offerings. The rules will provide investors with consistent, comparable, and decision-useful information, and issuers with clear reporting requirements," Gensler added.
That announcement, however, was immediately denounced by Republican lawmakers, who accused the SEC of federal overreach.
Now, Scott says he plans to employ the Congressional Review Act (CRA), a seldom-used oversight tool employed by Congress used to overturn rules issued by agencies such as the SEC.
Sen. Tim Scott, R-S.C., speaks to guests at the Republican Party of Iowa 2023 Lincoln Dinner in Des Moines, Iowa, on July 28, 2023. (Scott Olson/Getty Images / Getty Images)
"The SEC’s final climate disclosure rule threatens economic opportunity across the country, and it must be overturned. Over and over again, SEC Chair Gensler has disregarded the real-world impacts of his aggressive regulatory agenda in his dogged pursuit of left-wing political priorities. This rule is no exception," Scott said in a statement to FOX Business.
"The SEC’s mission is to regulate our capital markets and ensure all Americans can safely share in their economic success — not to force a partisan climate agenda on American businesses," Scott continued.
The CRA currently has 34 cosponsors – more than enough needed for a discharge petition — and expands its list of supporters across the aisle, to West Virginia Democratic Sen. Joe Manchin.
The CRA currently has 34 cosponsors — more than enough needed for a discharge petition — and expands its list of supporters across the aisle, to Sen. Joe Manchin, D-W.Va. (Scott Eisen/Getty Images / Getty Images)
Legal challenges have engulfed the rule since its introduction, with lawsuits filed by both Republicans and Democrats for differing reasons.
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Twenty-five Republican attorneys general filed a lawsuit almost immediately after finalization of the rule. That was followed by litigation from various energy and commerce groups, including the U.S. Chamber of Commerce.
Missouri Attorney General Andrew Bailey, who participated in the suit, condemned the Biden administration on X, saying, "The mandate is part of Biden’s radical green scheme to influence investments based on climate change theories instead of returns."
Conversely, the rule also found detractors from the progressive Sierra Club, which sued the SEC over allegations that the final rule "will yield much less information about companies’ exposure to climate-based risks than the [original] proposed rule would have."
The Sierra Club, in a statement announcing the lawsuit, wrote, "While the SEC's final climate disclosure rule will provide investors with some much needed information, the Commission's arbitrary decision to remove robust emissions disclosure requirements and other key elements from the proposed rule falls short of what the law requires."
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The path forward for Scott’s CRA resolution is unclear in the Democratic-led Senate, but it currently enjoys the support of every Republican member on the Senate Banking Committee.
Scott, discussing the resolution, was critical of the SEC, offering a simple word of advice.
"This rule is federal overreach at its worst, and the SEC should stay in its lane," he said.