Chairman Joe Manchin, DW.Va., conducts a Senate Committee on Energy and Natural Resources hearing on domestic and international energy price trends on Tuesday, November 16, 2021 in the Dirksen Building.
Tom Williams | CQ Roll Call, Inc. | Getty Images
Senator Joe Manchin said Monday he was “deeply concerned” about the news climate data proposed by the Securities and Exchange Commission.
In a letter to the SEC, the West Virginia Democrat said the proposals go against the regulator’s stated mission and that such policies will create “undue burdens on companies,” particularly in the fossil fuel industry.
“The most worrying part of the proposed rule appears to be its targeting of our country’s fossil fuel companies,” he wrote.
The SEC announced proposed climate data disclosure rules on March 21. Companies would have to report on greenhouse gas emissions, climate-related targets and targets, and how climate risks affect their business.
Manchin said the proposed changes are unnecessary for a number of reasons, including that nearly two-thirds of companies in the Russell 1000 index publish sustainability reports.
However, these reports vary greatly from company to company. At present, companies can largely choose what information is reported and how it is reported. Collecting and verifying climate data can also be difficult.
“To claim that all public companies have the resources and skills to collect this data is short-sighted,” the letter said. Manchin said imposing such requirements on companies could bring “unreasonable financial hardship” and also undermine public confidence.
Manchin is among the most conservative Democrats in the Senate and has opposed key policy proposals favored by Democrats, including the president Joe Biden‘s Bill Back Better Bill. He has financial ties to the coal industry and regularly receives donations from fossil fuel executives including Ryan Lance of ConocoPhillips and Vicki Hollub from Occidental.
Manchin said the SEC’s proposed rules “appear to politicize a process designed to assess a public company’s financial health and compliance.” He specifically pointed out requirements around the disclosure of scope 3 emissions. which are indirect emissions from a company’s supply chain. These emissions can be particularly difficult to track.
The SEC’s proposed rule states that Scope 3 emissions must be tracked “if they are material.”
Manchin pointed out that some companies are already required to provide data to the Environmental Protection Agency, for example, so adding more data reporting requirements is unnecessary work. He said it will ultimately be “timely and costly” for public companies and could also confuse investors.
“Ultimately, I’m interested in implementing rational rules that ensure the system is fair. Reassessing the responsibilities of our nation’s energy companies under these disclosures is a critical component to achieving that fairness,” Manchin concluded.
The SEC’s new rule is currently on a 60-day public comment period.
— CNBC’s Thomas Franck contributed coverage.