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Alabama GOP congressional delegation concerned over SEC’s new ESG rule

Members of the Alabama GOP congressional delegation joined more than 100 other members of Congress in a letter to the chairman of the Securities and Exchange Commission (SEC) expressing concern about a new “Enhanced and Standardization of Climate-Related Disclosures for Investors” rule, which they say could hurt small farms.

The rule is influenced by a new investment trend that looks at environmental, social and governance (ESG) instead of just standard business performance.

U.S. Reps. Jerry Carl (R-Mobile), Mo Brooks (R-Huntsville), Mike Rogers (R-Saks), Gary Palmer (R-Hoover), Robert Aderholt (R-Haleyville) and Barry Moore (R-Enterprise) signed on to a letter to SEC chairman Gary Gensler. The letter, led by U.S. Rep. John Rose (R-Tenn.), argues the new rule is “unworkable.”

“It is our strong belief that this proposed rule, if promulgated, would be a significant and unworkable regulatory burden,” the letter states, “and a considerable departure from the SEC’s mission to protect investors, facilitate capital formation, and foster fair, orderly, and efficient markets. It is not within the purview of the SEC to regulate farmers and ranchers, which is what this rule would do by requiring public companies to disclose their Scope 3 greenhouse gas (GHG) emissions.”

The members of Congress say the rule is not needed because there are already environmental regulations on the books.

“Farmers are already regulated by agencies at the local, state, and federal levels,” the letter says. “There are currently multiple programs at the federal level to help farmers implement conservation practices. Bureaucrats in Washington, D.C. – specifically unelected SEC staff – who have no jurisdiction over environmental policy and who have never stepped foot on a farm should not have such influence over how farmers take care of their land.”

The letter also warns that the new regulation just adds an unnecessary burden on the hard working farmers in the country.

“The time and energy put into complying with this new regulation will divert American farmers away from their primary goal of producing our nation’s food, fuel, and fiber,” they argue in the letter. “As this rule is written, it is also unclear how farmers will be protected from privacy concerns as they, unlike corporations, live at their places of business where they would now have to disclose significant amounts of information.”

The members argue the SEC was also rushing the process for a “complex” rule.

“Finally, we are concerned that the comment period,” the letter continues, “although recently extended until June, is inadequate given the magnitude of this proposed rule, which totals 510 pages and has 1,068 technical footnotes. The Commission’s use of abbreviated comment periods for complex rules like this as well as the lack of consistency across rulemakings is troubling, as it will result in less, much-needed input from the public on these important issues.”

Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” Weekdays 9-11am on WVNN. You can follow him on Twitter @Yaffee