Today, the House Financial Services Subcommittee on Oversight and Investigations, led by Chairman Bill Huizenga (MI-04), is holding a hearing entitled “Oversight of the SEC’s Proposed Climate Disclosure Rule: A Future of Legal Hurdles.”
Watch Chairman Huizenga’s opening remarks here.
Read Chairman Huizenga’s opening remarks as prepared for delivery:
“I want to thank the witnesses for appearing before the subcommittee this morning.
“As I indicated last year at our first hearing—oversight is a vital check on the President’s power and on those he chooses to represent him.
“Today’s hearing should not be confused with a debate on climate change, but rather whether the Securities and Exchange Commission has the legal authority to mandate climate disclosures.
“Congress created the SEC to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation—not to advance a progressive climate agenda.
“First, the SEC has wildly underestimated the cost the rule will impose on public and private companies.
“Instead of conducting a thorough economic analysis, the already understaffed Division of Economic and Risk Analysis at SEC relied on left-leaning, environmental activist groups to justify its rulemaking.
“While the SEC asserts that the rule would cost current reporting companies roughly 10 billion dollars a year, a recent study puts that number at closer to 25 billion, with little analysis on how proposed scope 2 and scope 3 requirements will impact small businesses who frankly can’t afford a compliance department.
“Furthermore, this past Fall, the Fifth Circuit Federal Court of Appeals ruled against a separate SEC finalized proposal relating to share repurchase disclosure.
“In that opinion, the court rightfully held that the ‘the SEC acted arbitrarily and capriciously, in violation of the Administrative Procedure Act, when it failed to respond to petitioners’ comments and failed to conduct proper cost-benefit analysis.’
“Given the sheer volume, pace, and complexity of rules currently before the SEC, a 9.4 percent vacancy rate as of September 2023, and IG reports citing recruitment and retention challenges, one has to wonder how many finalized rules will ultimately be vacated.
“Which leads us to this question—in light of the Supreme Court’s ruling in West Virginia v. EPA, does the SEC have congressional authorization, to implement rules related to environmental or climate issues?
“In its ruling, the Supreme Court held that the EPA exceeded its statutory authority, relying on ambiguity as constituting an implicit delegation from Congress.
“Let’s be clear. Congress has not delegated the authority to the SEC to require climate disclosures. The Court’s decision signals the SEC’s authority to develop, finalize, and implement a climate disclosure rule is in jeopardy.
“And lastly, I want to close where I began—congressional oversight.
“I would be remiss if I didn’t speak to the subcommittee’s efforts to conduct oversight of the SEC’s climate rule and get answers to many of the questions we will hear about in testimony this morning.
“Though the SEC has responded to the Committee, and one might be impressed with 69,000 pages of documents, the devil is in the details.
“To date, the Commission has approved only 11,540 pages of responsive, non-public documents to be produced to the Committee, that is just 16 precent of the total documents produced.
“The SEC has flooded our subcommittee with unresponsive documents, including a copy of the rule itself, a copy of Chair Gensler’s public testimony before our committee which, I might add, I heard in person, press releases and the entire public comment file, which of course is public.
“Given this lack of cooperation and the contents of the material turned over to the committee to date, I can only conclude that Chair Gensler is intentionally slow rolling our investigation.
“I’ll let those watching draw their own conclusions.
“Whether the final climate rule is finalized next week or next month, I think we can conclude that the Chair has failed not only to convince his fellow commissioners, but the American people. And as we’ll hear today, he will likely not convince the court.
“I look forward to hearing from each of our witnesses this morning and with that, I yield back the balance of my time.”
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