The Sierra Club, America’s largest environmental nonprofit, is accusing the SEC in a lawsuit of supressing shareholder proposals related to the environment and climate change.
The nonprofit sued the SEC yesterday, alleging that the agency failed to respond to its Freedom of Information Act (FOIA) request for records pertaining to what it calls “the drastic increase in SEC decisions that have allowed companies to omit climate-related shareholder resolutions from proxy statements.”
In a sharp break from previous agency policy, SEC’s rejection of climate-related shareholder proposals has soared under the Trump administration, Sierra Club Senior Attorney Joshua Smith said in a statement.
The SEC has allowed companies not to hold votes on at least 12 climate-related shareholder resolutions in the last 18 months, including one that, if passed, would have forced Exxon to disclose the emissions targets it is using, Smith said.
In April, the Sierra Club filed a FOIA request with the SEC seeking documents related to its mounting rejections of climate change shareholder proposals. The SEC has neither provided any documents nor responded to this request within the 20-day timeline required by law, the nonprofit said.
The lawsuit, filed in the U.S. District Court for the Northern District of California, “challenges SEC’s failure to respond to this request,” Smith said.
“The American people have a right to know why the federal government is suppressing actions by private shareholders to hold corporate polluters accountable for their role in the climate crisis,” Smith added.
“FOIA mandates prompt access to these records, and the SEC’s delay is plainly unreasonable,” said Sierra Club attorney Van Swearingen, a partner in Rosen Bien Galvan & Grunfeld LLP.
“We’re taking [the SEC] to court to ensure that the public knows the truth,” Smith added.
Recent SEC decisions have run counter to precedent and demonstrate a direct threat to shareholder rights, said Danielle Fugere, chief counsel and president of the environmental nonprofit As You Sow.