Joe Manchin opposes the SEC’s climate disclosure rule

Chairman Joe Manchin, DW.Va. , a Senate Energy and Natural Resources Committee hearing on domestic and international energy price trends, at the Dirksen Building on Tuesday, November 16, 2021.

Tom Williams | CQ-Roll Call, Inc. | Getty Images

Senator Joe Manchin said Monday he was “extremely concerned” about the new Climate Disclosures Proposed by the Securities and Exchange Commission.

In a letter to the Securities and Exchange Commission, the West Virginia Democrat said the proposals run counter to the regulator’s stated mission, and that such policies would add “undue burdens to businesses,” particularly in the fossil fuel industry.

“The most troubling part of the proposed rule is what appears to be the targeting of fossil fuel companies in our country,” he wrote.

The Securities and Exchange Commission (SEC) announced the proposed rules on climate disclosures on March 21. Companies will be required to report on greenhouse gas emissions, climate-related goals and objectives, as well as how climate risks affect their business.

Manchin said the proposed changes are unnecessary for several reasons, including that nearly two-thirds of companies in the Russell 1000 Index issue sustainability reports.

But these reports vary greatly between companies. Currently, companies can largely choose what information to report and how to report it. Climate data collection and verification can also be challenging.

“Suggesting that any and all public companies have the resources and capabilities to capture this data is shortsighted,” the letter read. Imposing such requirements on companies could impose “undue financial difficulties” and undermine public confidence, Manchin said.

Manchin is among the more conservative Democrats in the Senate and has opposed major policy proposals favored by Democrats, including the president. Joe BidenBill Back Better Bill. He has financial ties to the coal industry, and receives regular donations from fossil fuel executives, including Ryan Lance of ConocoPhillips Vicki Hollub from Occidental.

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Manchin said the SEC’s proposed rules “appear to politicize a process intended to assess the financial health and compliance of a public company.” He specifically referred to requirements relating to disclosure of Scope 3 emissions. They are indirect emissions from the company’s supply chain. These emissions can be particularly difficult to track.

The proposed rule from the Securities and Exchange Commission states that Scope 3 emissions must be tracked “if they are material.”

Manchin noted that some companies are already required to submit data to the Environmental Protection Agency, for example, so adding more data reporting requirements is an unnecessary chore. That would ultimately be “convenient and expensive” for public companies, he said, and could also confuse investors.

“Ultimately, I’m interested in implementing common sense and making sure the system is fair,” Manchin concluded. “Reevaluating the responsibilities of our nation’s energy companies within these disclosures is a critical component of arriving at that equity.”

The new rule for the Securities and Exchange Commission is currently in a 60-day period for public comment.

CNBC’s Thomas Frank contributed to this report.

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