Landmark SCOTUS decision may prove SEC’s proposed climate power-grab ‘unlawful’

(Video: Fox Business)

At the close of the Supreme Court term, many lauded the litany of rulings from justices as a historic achievement for conservatism, and, while the overturning of Roe v. Wade has garnered most of the media attention, another decision may be proving just as critical to disrupting the push toward progressivism.

In March, the Securities and Exchange Commission (SEC) introduced a proposal for a new rule in line with the woke demands of Environmental, Social and Governance (ESG) scoring. As previously reported, all publicly-traded companies would have to disclose how “severe weather events and other natural conditions” may impact their business.

SEC Commissioner Hester Peirce is not a fan of the proposal and she joined Jack Otter, editor-at-large of Barron’s Group, for an appearance on Fox Business’ “Barron’s Roundtable” to briefly explain why.

“Opponents say the rule is unlawful because of a recent Supreme Court decision that appears to limit agencies’ ability to enact new regulations,” Otter stated before he brought in Peirce for comment.

Making clear that her opinions were her own and not reflective of the commission or other members, she laid out that the “SEC does require companies to disclose all kinds of risks that are material and that includes climate risk. And so, I don’t see the need for a special rule to do that but, we’re in the process of reviewing comments now and I think a lot of commenters agree with me that there are concerns about the proposal.”

At the time of its proposal, Peirce had stated it “will undermine the existing regulatory framework that for many decades has undergirded consistent, comparable, and reliable company disclosures. We cannot make such fundamental changes to our disclosure regime without harming investors, the economy, and this agency.”

However, the commissioner, who was originally nominated by President Barack Obama, and appointed as commissioner by President Donald Trump after being blocked by Senate Democrats, is currently the only Republican on the board with three Democrats. Noting that, the Supreme Court ruling in the case of West Virginia v. EPA that essentially prohibited bureaucracies from creating new regulations without congressional approval looms large.

“Congress, however, did not give us plenary authority over the economy and did not authorize us to adopt rules that are not consistent with applicable constitutional limitations,” Peirce stated prior to the Supreme Court ruling “This proposal steps outside our statutory limits by using the disclosure framework to achieve objectives that are not ours to pursue.”

To Otter, she added, “We have to take a little bit of a step back and not try to rewrite all our rules at once. The SEC is right now very aggressively working on many different rules from climate to equity market structure reform and that’s a lot to get done at one time.”

The commissioner was not alone in her staunch opposition to the proposal as 16 governors led by Gov. Spencer Cox (R-Utah) issued a letter to President Joe Biden urging him not to go forward with the regulation.

“The unprecedented level of federal overreach makes your proposed rule an especially dangerous step. The SEC’s congressionally directed mission is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets,” the letter stated with support from the governors of Alabama, Alaska, Arizona, Arkansas, Idaho, Iowa, Mississippi, Missouri, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, Utah, and Wyoming.

“The proposed rule degrades and undermines that mission by injecting subjective political judgments on climate policy into corporate disclosures, in a manner calculated to harm the states that provide for America’s energy security,” the governors went on.

It remains to be seen whether the rule will be adopted and ultimately, challenged in the courts.

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