WASHINGTON, D.C. — Boyden Gray PLLC has submitted an additional letter commenting on the SEC’s proposed climate disclosure rule. The letter brings to the SEC’s attention three new developments that exacerbate the problems with the SEC’s already-unlawful proposal. These include:

  • California’s SB 253 and SB 261 Provide No Justification for the Costs of the Proposed Rule: There is concern that, like other agencies before it, the SEC may try to improperly rely on California’s recently enacted disclosure laws to justify the costs of its own rule. The letter explains that an agency cannot use a state law to exercise powers that it was never authorized to use in the first place. This is particularly unlawful when, as the California disclosure rules are, these state laws are themselves unlawful.
  • Collapsing Demand for ESG Investment Products Further Undercuts the SEC’s “Investor-Demand” Rationale: The letter explains that today, “the very asset managers the SEC cited in the proposed rule are sharply pulling back from the ESG investment products that require climate-related information. On the SEC’s own rationale, the ‘investor demand’ the proposed rule discusses no longer exists.” 
  • The Termination of ESG Ratings Products in the Market Undercuts the Proposed Rule’s Purported Benefit of Reducing Reliance on Private ESG Ratings: In it’s proposal, the SEC suggested that a benefit of its climate disclosure rule was that mandated “direct disclosures [of climate-related information] would reduce reliance on ESG ratings’ provided by private ratings companies.” But the letter explains that “This benefit is either highly diminished or no longer available, as leading private ratings companies are increasingly abandoning the ESG ratings market.” 

Click to read the full letter.