More than 100 House members from both parties have criticized a proposed Securities and Exchange Commission rule requiring farmers to provide detailed climate data to public companies, as reported by Fox Business.
New Proposed SEC Rule Would Harm US Small Farms
House members say the proposed ESG regulatory requirements for small farms are “unworkable” and could hinder farmers from working with public companies. The new regulations are dubbed “Enhanced and Standardization of Climate-Related Disclosures for Investors” and are part of a recent trend towards environmental, social and governance (ESG) investing. ESG investing involves investors evaluating the criteria in addition to standard corporate performance data.
House unites to criticize proposed ESG rule
The House members criticizing the new ESG rule have a total of 118 members, including both Democrats and Republicans. They have written and signed a letter expressing their concerns to Gary Gensler, chairman of the Securities and Exchange Commission (SEC).
The letter read: “We firmly believe that this proposed rule, if enacted, would be a significant and unworkable regulatory burden, and a significant departure from the SEC’s mission to protect investors, facilitate capital formation and provide fair, orderly and efficient markets. It does not fall within the SEC’s purview to regulate farmers and ranchers, which this rule would do by requiring public companies to disclose their Scope 3 greenhouse gas (GHG) emissions. companies, small farms would be required to release a significant amount of climate-related information. But unlike large companies, small farms do not have full compliance departments. Imposing these additional reporting requirements could disqualify small family businesses from doing business with companies, which could lead to more consolidation in the agricultural sector.”
SEC demands climate-related disclosures
Fox Business reports that the SEC’s proposed rule requires registrants to include a certain number of climate-related disclosures in their registration statements and periodic reports. These climate-related disclosures contain information about climate-related risks that are considered ‘reasonably probable’ to have a material impact on their business, results of operations or financial condition.
Speaking in March in support of the new rule, Gary Gensler said, “I am pleased to support today’s proposal because, if passed, it would provide investors with consistent, comparable and decisive information for making their investment decisions.”
However, members of the House who criticized the new rule received support from the American Farm Bureau Federation. They believe the rule will force farmers and ranchers to keep records they simply don’t have the resources to do.
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This post New Proposed SEC Rule Would Harm US Small Farms was original published at “https://smallbiztrends.com/2022/05/new-proposed-sec-rule-would-hurt-small-farms.html”