Washington – The House Financial Services Committee today held a hearing entitled “Oversight of the Securities and Exchange Commission.” Led by Chairman Patrick McHenry (NC-10), who has taken hundreds of thousands of dollars in campaign contributions from Big Oil, the hearing was a platform for extreme politicians to double down on harmful misinformation around responsible investing and climate risk disclosures, and fear monger the U.S. Securities and Exchange Commission (SEC) from supporting a more transparent, risk-averse financial system.
In response to the hearing, Unlocking America’s Future Spokesperson Kyle Herrig said the following:
“Members of Congress should be focused on real issues like funding the government and not leveraging their positions of power to appease their wealthy donors from the oil and gas industry. Chairman Patrick McHenry’s attacks against the SEC were completely baseless, undermined investor demands, and ignored the American public’s broad, bipartisan support for responsible investing and climate risk disclosures.”
Below is a roundup of fact checks on some of the statements made at the hearing today.
In his opening remarks, Rep. McHenry accused the SEC of becoming “rogue” and that it “routinely exploits its authority to the detriment of our capital markets, innovation, and the American people.”
- FACT: Two-thirds of voters (80% of Democrats, 65% of Independents, and 55% of Republicans) supported the SEC’s initial climate risk disclosure proposed rule. More than half of voters, including 52% of Republicans and 63% of Independents, say they oppose Congress putting limits on these kinds of disclosures, and a majority of voters agree that financial managers should be allowed to consider environmental factors when making investing decisions.
Rep. McHenry accused SEC Chair Gary Gensler of pushing rules that “exceed the SEC’s statutory authority, often with inadequate justification, economic analysis, and public engagement.”
- FACT: After the SEC released its initial proposal, nearly 200 investment firms, nonprofits, and State Treasurers sent a joint letter reaffirming support for the rule and outlining imperatives for the standard transparency requirements. Global investment firm Franklin Templeton, which oversees more than $1.5 trillion in assets under management, also issued its own statement of support.
- FACT: Prior to the rule being issued, an overwhelming body of research, including from leading think tanks, showed that transparency is the bedrock of America’s financial system and argued the “consequences of climate change are creating new and growing forms of financial risk that investors need to consider when choosing how to prudently allocate capital.” The body of research also pointed out that America’s current voluntary disclosure environment is expensive for both issuers and investors, hindering decision-making and effective capital investments.
Rep. McHenry even flagrantly suggested that the SEC’s actions on climate risk disclosure standardization would hinder America’s competition with Europe in “technological innovation and adoption.”
- FACT: It is the opposite – climate disclosure requirements are increasingly becoming a global precedent. America’s global partners, including Canada and the European Union, and competitors, including China, have already instituted some version of the SEC’s rule.
