State Treasurer Curtis Loftis Joins 22 State Financial Officers in Letter to SEC Highlighting Concerns with Controversial ESG Disclosure Rule
June 20, 2022
South Carolina Treasurer Curtis Loftis joined 22 other state financial officers from across the U.S. in a letter to the Security and Exchange Commission (SEC) highlighting eight concerns with the proposed ESG disclosure rule, "The Enhancement and Standardization of Climate-Related Disclosures for Investors."
The SEC proposed rule would mandate climate-related disclosures for public companies, elevating political causes like climate change over the investors’ fiduciary responsibility. Treasurer Loftis has been a consistent leader in resisting mandates from unelected bodies, especially as it relates to public pension reform, overreaching regulations that harm taxpayers and states, and more recently, the increased emphasis on ESG.
"This is another flagrant attempt by the Biden administration to take power away from the states by circumventing the democratic process and legislating through SEC regulations," Treasurer Loftis said. "I am committed to working with my fellow state treasurers and auditors to fight the Left's continued push of ESG and their lack of regard for how this will impact our states and citizens."
The joint letter from the State Financial Officers Foundation (SFOF) highlighted eight concerns with the SEC proposed rule:
- The SEC is not a climate regulator, and this rule lies outside the scope of SEC’s responsibilities.
- This proposed rule violates the First Amendment, because it will force issuers to speak extensively to businesses about their impacts to climate change.
- The proposed rule does not consider impacts to everyday Americans in an unstable economic environment.
- This proposed rule would be extremely costly for issuers and fails to highlight benefits of these increased costs.
- The proposed rule indulges in climate exceptionalism elevating climate concerns above pertinent economic risks.
- Additionally, it fails to consider relying on the EPA’s existing greenhouse gas (GHG) emissions registry, which already requires disclosures for environmental issues.
- A justification for this proposed rule is comparable data, but it fails to enable comparisons across issuers making it impossible to produce consistent data for investors.
- This rulemaking process has been biased from the start. The core decision to require additional disclosures has been prejudged by the SEC Acting Chair, which has not allowed the proposed rule to have fair and full consideration.
A copy of the full letter can be found here.