Yesterday, Congressman McHenry (R-NC), the Chairman of the House Financial Services Committee, hosted a hearing entitled: “Beyond Scope: How the SEC's Climate Rule Threatens American Markets.” As could be expected, the hearing featured significant criticism of the SEC's rule on mandatory climate disclosures; according to Congressman McHenry : “the SEC's final climate disclosure rule would be catastrophic for our markets and American competitiveness.” Specifically, as reflected in the committee memorandum issued in conjunction with the hearing, the SEC's climate disclosure rule was described as imposing “new requirements that will increase public companies' compliance costs, add complexity to their operations, and subject them to increased litigation risk.” 

As part of the hearing, a bill was proposed to express Congressional disapproval of the SEC rule. (If a “Congressional disapproval” bill is passed by both houses of Congress and signed by the President (or approved over a Presidential veto), then a rule issued by an administrative agency becomes null and void.) While this Congressional disapproval bill may be enacted by Congress (particularly as certain moderate Democrats may defect), it will almost certainly be unsuccessful in overturning the SEC's climate disclosure rule, as it is extraordinarily unlikely that President Biden would allow a key plank of his environmental platform to be overturned. Thus, the activities in Congress concerning this Congressional disapproval are likely futile and will not result in a policy victory.

In any event, this action by the Republican-controlled House Finance Committee demonstrates yet again that the question of the climate disclosures mandated by the SEC has become a decidedly partisan issue.