Democratic Sen. Joe Manchin has once again joined with Republicans in the upper chamber to push back against a rule he believes will be very harmful for the country’s energy production.
The Securities and Exchange Commission (SEC) has offered a proposal that would require firms to disclose how their operations impact the climate, but he believes the rule is primarily aimed at the fossil fuel industry.
“In that sense, one could argue that the proposed rule aims to solve a problem that does not exist,” the moderate West Virginian, whose state is a major producer of coal and natural gas, said in a letter to SEC chairman Gary Gensler.
“Further, to suggest that any and all public companies have the resources and capabilities to capture this data is shortsighted,” Manchin added.
“Forcing this rule on companies has the potential to not only impose undue financial hardships but also to erode public trust, especially if less-resourced companies are unable to accurately report this data,” he added.
“Not only will these companies face heightened reporting requirements on account of their operations, but they will also be subjected to additional scrutiny for the Scope 3 emission disclosures of other companies that utilize their services and products,” Manchin said.
According to the Washington Examiner:
The West Virginia Democrat expressed his opposition to the plan in a Monday letter to SEC Chairman Gary Gensler. He told Gensler that the rule, which creates guidelines for how and what companies must report to investors about the emissions their companies are responsible for, might not be needed given that the overwhelming majority of major corporations already file sustainability reports that include information about climate risks.
The SEC classifies a corporation’s emissions into three categories called scopes. Scope one is a company’s direct emissions, scope two refers to its indirect emissions (such as those involved in the use of electricity), and scope three measures the emissions from other entities, such as suppliers or customers along a company’s value chain.
Under the SEC plan, the scope three reporting requirement, the most divisive, is set to be phased in gradually and includes carve-outs based on the size of a company. Scope three disclosures would also just apply to companies that consider such emissions to be “material” to investors.
Republicans also are pushing back on the rule.
“Complex political issues like global warming and energy security require tradeoffs. In a democratic society, those tradeoffs must be made by elected representatives who are accountable to the American people,” retiring Sen. Pat Toomey (R-Pa.) said.