The U.S. Securities and Exchange Commission (SEC) proposed adding climate reporting, including direct and indirect emissions plus greenhouse gases, as a requirement for companies in the United States.
The proposed legislation could be finalized later this year and would mandate that businesses report the "actual or likely material impacts" of climate change on their business, according to a press release from the SEC.
"Companies and investors alike would benefit from the clear rules of the road proposed in this release," SEC Chairman Gary Gensler said in the release. He was referring to what he claims is broad support for uniform climate reporting requirements, according to the SEC.
The Senate Banking Committee's top Republican, Sen. Patrick Toomey (R-Pa.), blasted the proposal and said it "extends far beyond the SEC's mission," Reuters reported. This sentiment was echoed by others in the business community.
"The Supreme Court had been clear that any required disclosures under securities laws must meet the test of materiality, and we will advocate against provisions of this proposal that deviate from that standard," Tom Quaadman, executive vice president for the U.S. Chamber’s Center for Capital Markets Competitiveness, said in a statement.
Reuters noted that according to Morningstar, a record $71 billion flowed into funds focused on U.S. environmental, social, and governance (ESG) last year.
"The biggest antitrust violation in history may be in plain sight," Mark Brnovich, Arizona's attorney general, said in an op-ed published in the Wall Street Journal early this month. Brnovich explained that Wall Street banks and money managers have been coordinating to stop investments in traditional energy sources like oil and gas.
In his op-ed, Brnovich also pointed out that large banks and money managers want to implement compliance with political agendas such as the Paris Climate Accord.
He added that activist groups like Climate Action 100+ rally to push their agenda in shareholder meetings and have a "significant impact on critical investments in America's energy infrastructure."
Climate Action 100+ is made up of 617 global investors who are responsible for more than $65 trillion in assets, according to the organization's website.