Bill Overview
Title: To prohibit the Securities and Exchange Commission from finalizing the proposed rule titled "The Enhancement and Standardization of Climate-Related Disclosures for Investors", and for other purposes.
Description: This bill prohibits the Securities and Exchange Commission from finalizing the rule proposed on April 11, 2022, and titled The Enhancement and Standardization of Climate-Related Disclosures for Investors . The proposed rule requires registrants to disclose their climate-related risks.
Sponsors: Rep. Hill, J. French [R-AR-2]
Target Audience
Population: People affected by SEC climate-related disclosure regulations
Estimated Size: 180000000
- The proposed rule impacts companies which are required to disclose climate-related risks.
- Investors rely on climate-related disclosures to make informed decisions.
- Regulators and policymakers use climate-related data to enforce regulations.
- Stakeholders affected by climate changes are indirectly impacted by corporate climate strategies.
- Data driven by such disclosures assists in shaping sustainable economic policies.
Reasoning
- The population affected by the SEC rule on climate-related disclosures mainly includes individuals in financial and climate-sensitive sectors.
- There are multiple layers of impact: direct impact on professionals tasked with compliance, indirect impact on individual investors, and long-term societal impacts involving climate change adaptation.
- The budget constraints limit the policy's scaled implementation and effectiveness, particularly in the early years, which means that direct, immediate impacts are more likely to be observed among professionals and investors closely tied to climate disclosures.
- Considering this policy addresses a broad spectrum of activities including investor decisions, corporate governance, and environmental considerations, the impact on self-reported wellbeing will vary significantly based on individual roles in these areas.
Simulated Interviews
Environmental Analyst (New York, NY)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The ability to standardize climate-related disclosures is crucial for both transparency and sustainability.
- Lack of required disclosures can mislead investors and is a step backward for environmental policy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 5 | 7 |
| Year 3 | 5 | 7 |
| Year 5 | 4 | 8 |
| Year 10 | 3 | 8 |
| Year 20 | 4 | 7 |
Financial Advisor (Austin, TX)
Age: 35 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Financial transparency for climate risks helps advisors like me guide clients effectively.
- This setback will make my job challenging as investor trust may erode.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 7 |
| Year 5 | 5 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 7 | 8 |
Corporate Lawyer (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- This policy eases regulatory pressures but dampens initiatives towards more sustainable governance.
- Corporations may exploit fewer disclosure requirements, sidelining ethical considerations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 9 |
| Year 3 | 7 | 9 |
| Year 5 | 7 | 9 |
| Year 10 | 7 | 8 |
| Year 20 | 6 | 8 |
Retail Investor (San Francisco, CA)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 8.0 years
Commonness: 12/20
Statement of Opinion:
- Accessibility to climate impact information is crucial for small investors like me.
- Without information, my investment strategy changes to avoid potential risks, which limits my options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 5 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 9 |
Investor Relations Manager (Miami, FL)
Age: 40 | Gender: female
Wellbeing Before Policy: 9
Duration of Impact: 4.0 years
Commonness: 4/20
Statement of Opinion:
- This policy affects my role as stakeholders demand consistent climate risk information.
- Lack of governmental backing reduces the credibility of our disclosures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 9 |
| Year 2 | 6 | 9 |
| Year 3 | 6 | 9 |
| Year 5 | 6 | 9 |
| Year 10 | 7 | 9 |
| Year 20 | 7 | 9 |
CEO of a Renewable Energy Company (Phoenix, AZ)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- While not directly impacted, we would benefit from standardized disclosures for industry benchmarking.
- Lack of policy may delay adoption of sustainable practices.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 9 |
| Year 10 | 8 | 9 |
| Year 20 | 8 | 9 |
Retiree with investments (Denver, CO)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I want my savings secure, knowing risks associated with investments including climate ones, is reassuring.
- Without such disclosures, it feels like flying blind.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 7 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 7 | 8 |
Climate Policy Advocate (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 6/20
Statement of Opinion:
- The prohibition is a clear indication of neglect by the government to address pressing climate issues adequately.
- More barriers for advocates will only delay progress and compound climate risks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 7 |
| Year 2 | 5 | 8 |
| Year 3 | 4 | 8 |
| Year 5 | 4 | 8 |
| Year 10 | 3 | 8 |
| Year 20 | 2 | 8 |
Factory Worker (Detroit, MI)
Age: 60 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- I don't see how these rules affect my daily job, but sustainable practices could lead to more stable jobs in the future.
- I've heard about climate change, and rules might be necessary for the planet.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Climate Scientist (Los Angeles, CA)
Age: 33 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- Prohibiting these rules hampers the flow of essential data for developing accurate climate models.
- It's a disheartening policy that undermines scientific integrity.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 8 |
| Year 2 | 5 | 9 |
| Year 3 | 5 | 9 |
| Year 5 | 5 | 9 |
| Year 10 | 4 | 9 |
| Year 20 | 4 | 10 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $15000000 (Low: $10000000, High: $20000000)
Year 3: $15000000 (Low: $10000000, High: $20000000)
Year 5: $15000000 (Low: $10000000, High: $20000000)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- The prohibition of the rule eliminates ongoing compliance and enforcement costs for the SEC.
- Investors will have less standardized climate risk data, affecting decision-making.
- Businesses save on compliance, but lack of transparency may pose future risks.