Sen. Tim Scott (R-SC) announced he will force a vote to overturn the SEC’s climate disclosure rule just after it was adopted.
Scott, who is the ranking member of the Banking Committee, said Wednesday that he intends to use the Congressional Review Act to hold a vote on the rule. The Congressional Review Act allows Congress to vote down administrative rules through an expedited process. Scott’s office said timing for the vote is not yet clear.
The announcement came right after the Securities and Exchange Commission voted 3-2 to adopt the controversial rule, which sets requirements for how and what companies must report to investors about how their operations affect the climate. It requires large and mid-sized companies to report greenhouse gas emissions — reports that would be audited by an outside party.
“The last time I checked, the SEC is a securities regulator that does not employ climate scientists, and it clearly has acted without regard to the onerous burdens placed on businesses of all sizes — a blatant disregard that will harm Main Street the most,” Scott said.
“This is federal overreach at its worst, and as the lead Republican on the Senate Banking Committee, I intend to utilize the Congressional Review Act to fight this rule and protect economic opportunity for all Americans,” he said.
The Congressional Review Act allows for resolutions to be brought to the floor of the Senate through an expedited process, meaning that it could not be stopped by Senate Majority Leader Chuck Schumer (D-NY). The success of the vote would hinge on Democratic centrists, such as Sens. Joe Manchin (D-WV) and Kyrsten Sinema (I-AZ). The vote would almost certainly be approved by the House, which is controlled by Republicans.
Last year, Republicans and a few Democrats passed a measure that would have canceled a Labor Department rule allowing retirement plan managers to weigh environmental and social issues when making investments. That resulted in the first veto of Biden’s presidency.
Should Scott’s measure pass, Biden will likely end up vetoing the move. Still, voting down the SEC’s climate disclosure rule would be seen as a statement against environmental, social, and governance standards, known as ESG.
The new SEC climate rule is significantly scaled down from a proposed version by omitting a requirement that corporations disclose emissions generated by suppliers and customers. Still, it is expected to face legal challenges from the industry.
Self-reporting of climate information has already become commonplace in business as investors increasingly embrace ESG, but the rule would take the trend a step further by imposing reporting requirements.
Republicans immediately trashed the move, arguing that the rule will end up hurting consumers down the line.
“The SEC made itself an enemy of the free market today,” Derek Kreifels, CEO of the State Financial Officers Foundation, said in a statement.
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“Its onerous climate disclosure rule places an enormous burden on American businesses, large and small,” he added. “They will be forced to take resources that could have gone to keeping prices low or reinvesting in the American economy, and instead waste them on staying in compliance with a rule that has no business existing in the first place.”
So far in his nearly four-year presidency, Biden has only vetoed 10 bills — all coming within the last year.
