The public will have an additional month to weigh in on the Securities and Exchange Commission's controversial climate-related disclosure rule, a win for industry groups that asked for more time to weigh on the first-of-its-kind proposal.
The SEC announced on Monday that it extended the comment period for its climate-related disclosure rule, which would require companies to report both direct and indirect greenhouse gas emissions, through June 17. The original deadline was May 20.
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SEC Chairman Gary Gensler said people and entities "with diverse views have noted that they would benefit from additional time to review these three proposals."
The SEC published its proposed rule on March 21 to the praise of environmental groups and many Democrats, who support a disclosure rule as a means of hastening the economy's shift away from fossil fuels and toward greener alternatives.
The proposal, pitched as a tool to keep investors informed about risks, would make any corporation report to investors the greenhouse gas emissions coming directly from its operations, as well as those generated indirectly from the purchase of energy.
It would also require that companies disclose “Scope 3” emissions, or those associated with activities like employee commuting, transportation and distribution activities, and business travel, as well as emissions stemming from the use of a company’s products.
Leading Republicans and oil and gas industry groups opposed the rulemaking, arguing the proposal and the philosophy behind it are responsible for stifling investment in fuel commodities that are in high demand.
Gensler defended the commission’s proposal during a public event last month, saying it fits into the SEC’s “long tradition of disclosures” and is warranted to inform investors.
The commission has historically “stepped in when there is significant need for the disclosure of information relevant to investors’ decisions,” he also said. “That’s where we are right now, by the way.”
Oil and gas groups were among those who asked for more time to comment on the proposal. In a letter to Gensler late last month, 36 trade associations called the proposed rule "uniquely ill-timed" considering how high energy prices are and asked him for an extension.
They called the existing comment period "woefully inadequate for the magnitude of this rule."
"SEC has a statutory obligation to provide the public with a meaningful opportunity to comment," the groups wrote. "Thirty-nine days does not constitute a meaningful opportunity when there are so many wide-ranging economic and financial impacts from this rule."
The SEC's announcement provided for an additional month of comment on two other proposed rules, including one that would require investment advisers to be more transparent about the costs of investing in private funds.
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Chris Iacovella, CEO of wealth management trade group American Securities Association, said the extensions for each rule were welcome but inadequate.
“Major proposed rulemakings regarding the SEC’s foray into climate and private funds—which will further upend the U.S. economy and markets—deserve a minimum of 90 days for the American people to make their voice heard," Iacovella said.