October 24, 2022
Today, Utah Attorney General Sean. D. Reyes and 17 other state attorneys general pushed back against the Security and Exchange Commission’s attempt to stifle the public’s ability to provide input on overreaching and unlawful regulations regarding environmental, social, and governance (ESG) investing and disclosures regrading emissions from business’ entire supply chain following an announcement the Commission lost hundreds or perhaps thousands of public comments. In a letter to SEC Secretary Vanessa Countryman, the attorneys general called on her to extend the timeframe for public comment in a meaningful way.
The SEC announced it would reopen public comment periods for 11 rulemaking releases and one request for comment “due to a technological error that resulted in a number of public comments submitted through the Commission’s internet comment form not being received by the Commission.” According to the Commission, most of the affected comments were submitted in August 2022. The technological error, however, is known to have occurred as early as June 2021. Despite the initial comment periods being at least 60 days and not knowing how many comments were not received or who submitted them, the SEC’s reopened comment period was a meager 14 days.
“This short time period is insufficient to ensure that hundreds or perhaps thousands of affected entities are aware of the government glitch and know to properly respond. The public needs significant, additional time to comment on these rules,” AG Reyes said in the letter. “Because these rules impose burdensome requirements on regulated companies and will ultimately harm investors and all Americans, the SEC should extend the timeframe for public comment in a meaningful—not perfunctory—way, to ensure that all interested parties have the opportunity to comment on these rules.”
The shortened comment period is especially troubling when it comes to new requirements regarding environmental, social, and governance investment practices and a climate disclosure rule for that has been called “arguably the most significant rule-making initiative by the SEC for public companies in a generation.”
“Those proposed rules—in effect if not in form—seek to reorder public companies’ priorities from maximizing shareholder returns to improving climate reputation. To achieve these goals, the Commission’s proposed rules—which sweep far beyond its traditional area of expertise or statutory authority—would compel public companies to gather, create, and disclose a crushing amount of information. Such disclosures far exceed any information investors reasonably need. And in reality, they would empower the Commission to regulate disfavored industries into oblivion,” the letter reads. “These concerns are even more pressing because the proposed rules rest on thin legal ice: they exceed the Commission’s statutory authority, violate First Amendment protections against compelled speech, and are arbitrary and capricious.”
Montana Attorney General Austin Knudsen led the effort. The other states that signed onto the letter are Alabama, Alaska, Arizona, Arkansas, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Ohio, Oklahoma, South Carolina, South Dakota, Texas and West Virginia.