April 25, 2022
Public Comment
The Enhancement and Standardization of Climate-Related Disclosures for Investors
By submitting this comment, I am acting in the Notice and Comment Process provided by the Administrative Procedure Act (APA). Therefore, I am legally given an opportunity to participate in arguments expressing my views on this topic and they must be reviewed, considered, and responded to.
The SEC has authority to propose this rule under the 1933 Securities Act and the 1934 Securities Exchange Act however, I believe because of the nature of the rule the Environmental Protection Agency (EPA) may be better suited to handle this matter. The Environmental Protection Act established the EPA in 1970, and since then they have been given the responsibility of regulating any business acts causing an environmental impact. It is an inarguable fact that the disclosure of climate-related risks concerns the environment. While the SEC may be better suited to oversee the business/corporate wellbeing aspect of this proposed rule, the EPA is better suited to oversee the environmental and climate related issues, and there is no reason these two agencies cannot do so in conjunction.
While it may not always be the case, this proposed rule prioritizes the idea of Stakeholder Theory rather than Shareholder Primacy, as they should. Considering the environmental and political state that can be observed today, there are numerous things more important than the financial success of a business. The days of prioritizing profit over all else are far behind us and we must begin viewing the world for what it is: our home. You wouldnt think it sensible to burn your house to the ground while you are still inside, nor should you the Earth. Adhering to the idea of Stakeholder Theory, businesses may still thrive while reasonably mitigating their negative impact on the environment and preserving its long-term integrity. Shareholders alone are no longer our primary concern.
This rule does not restrict the rights of a corporate person, it simply expands their responsibilities. A requirement to disclose climate-related information in a corporations annual report does not prevent or restrict any of their prior duties or freedoms or hurt them in any way. This proposed rule is largely beneficial for the public and climate activists alike. Requiring corporations to be transparent regarding their environmental effects prevents them from sweeping potential violations under the rug and allows consumers to be more selective with which corporations they choose to support. From a policy-making standpoint, this is a huge leap forward as well. Government officials will have this information at their disposal, allowing them to make more educated choices and policies concerning the environmental effects of various business dealings.