Former SEC Chairman Jay Clayton minced no words when discussing the agency’s embattled climate change rules at a U.S. Chamber of Commerce event yesterday.
“Stay in your lane,” Clayton told the SEC, adding that climate change policy should be left up to Congress. Controlling companies’ greenhouse gas emissions is “not our job,” said Clayton, who was appointed by former President Donald Trump and served as chair from 2017 to 2020..
“Let Congress do their job,” Clayton added.
Members of Congress did not go unscathed either during Clayton’s remarks. He said Democrat lawmakers such as Sen. Elizabeth Warren of Massachusetts have given away their legislative power by punting responsibility for climate policy to the SEC. Warren has been vocal in asking the agency to propose its disclosure rules, which she has insisted the regulator has the authority to promulgate.
Clayton’s remarks come as the legal challenges to the SEC’s proposed corporate emissions disclosure rules continue to mount. The rule was approved in March and stayed by the agency in April after numerous lawsuits against the rule were filed. The SEC vowed to “vigorously defend” the climate disclosure rules in litigation, when it issued its stay.
The U.S. Chamber of Commerce is one of more than 30 plaintiffs suing the SEC over the rules in the U.S. Court of Appeals for the Eight Circuit. The plaintiffs allege that the SEC violated securities laws and disregarded limits on its rulemaking power in its attempt to mandate reductions in companies’ greenhouse emissions.
In April, 18 Democratic states filed a motion to intervene in the lawsuit in support of the SEC’s rule.
Republican Sen. Tim Scott of South Carolina has filed legislation to overturn the SEC’s climate rule, calling the regulation “radical” and saying it would “bury public companies in paperwork, raise costs for consumers and stifle economic opportunity.” Thirty-three Republican members of the Senate Banking Committee have signed onto the legislation.
The SEC did not respond to a request for comment.
“For its part, the SEC claims that climate disclosure rules are critical to its objective of ensuring that investors receive consistent and comparable data concerning the risks that the climate poses to public companies (and vice versa) and how, if at all, those companies are addressing those risks,” the law firm of Fox Rothchild said in a note to clients.
“With a stay of the final rule in place pending the outcome of the existing and any future legal challenges, it is unclear when, or if, the climate disclosure rule will become effective,” the law firm said.