Dive Brief:
- An analysis of 241 elected Republicans in Congress and statewide offices who have expressed enmity to the Securities and Exchange Commission’s coming climate disclosure rule revealed that the elected officials have received more than $152 million in career donations from the oil industry, according to a report exclusively shared with ESG Dive from Unlocking America’s Future, a pro-ESG 501(c)4.
- The report tallies 40 sitting Republican senators, 171 congressional representatives and 30 statewide officials who have collectively accepted millions from the oil industry over their political careers and have used their official positions to question the SEC’s climate disclosure rulemaking, according to campaign finance data from Open Secrets and the National Institute on Money in Politics.
- All 241 Republican officials listed in the report have publicly documented opposition to either the SEC’s climate rule, its potential inclusion of scope 3 disclosure requirements or both. Unlocking America’s Future spokesperson Kyle Herrig accused the oil and gas industry of “overtly attempting to misinform the American public about the benefits of corporate climate disclosures, obstruct the regulatory process and force risky investments,” in an emailed statement to ESG Dive.
Dive Insight:
Unlocking America’s Future said following the SEC’s initial climate disclosure proposal in March 2022, Republicans who have received millions in career campaign contributions from the fossil fuel industry and other polluting sectors began lodging public opposition with the agency. In addition to letters sent during the public comment period, congressional officials have introduced a spate of bills to either nullify or restrict the SEC’s rulemaking on the issue.
The initial proposal included a requirement that publicly traded companies disclose their scope 3 emissions. Some analysts now question whether the requirement will survive in the final rule and if that requirement continues to hold up the proposal’s finalization.
The group tallied over $37 million from the oil and gas industry going to 40 Republican senators, $45.9 million to 171 House Republicans and $69 million from polluting industries to 30 statewide officials.
“This is all part of a broader, coordinated effort to attack responsible investing while enriching those at the helm of the oil and gas industries,” Herrig said. “It is damaging to our economy, environment, and America’s presence on the global stage — and simply out of step with the American public.”
Unlocking America’s Future said the report’s release was timed to coincide with a Thursday morning House Financial Services Committee hearing on the SEC’s climate rule. Committee Chair Patrick McHenry, a North Carolina Republican and the one-time Speaker pro-tempore, has signed on to three letters regarding the disclosure rule, though none of the three have broached the topic of scope 3, according to the report. Unlocking America’s Future tabs his total oil and gas industry donations at over $396,000 in his 18-year congressional career.
Thursday’s hearing, focused on whether the SEC’s rule oversteps agency authority in light of recent legal cases, will have witnesses from the National Association of Manufacturers, law firm Mayer Brown, Schultz Fruitridge Farms, Incorporated and Emory University’s School of Law.
In the hearing’s memo, McHenry noted the Supreme Court’s 2022 ruling in West Virginia v. EPA — whose result limited agency rulemaking powers — and an October decision by the U.S. Court of Appeals for the Fifth Circuit that the SEC had failed to respond to comments and conduct a proper cost-benefit analysis in reviewing a separate rule, in violation of the Administrative Procedure Act.
“Notwithstanding these decisions, the SEC, at the direction of Chair [Gary] Gensler, continues to push through an aggressive regulatory regime that implicates the issues raised in [both cases],” Mchenry wrote Jan. 12.
The report found governors and attorney generals from Alabama, Mississippi, Montana, North Dakota, Texas and Utah have all signed public oppositions to the SEC’s climate rule and have received campaign contributions from the oil and gas, mining, utilities and industrial sectors.
Texas Gov. Greg Abbott, whose state has restricted companies who “boycott the fossil fuel industry” from working with the state, accounts for the lion’s share of the funds directed to state officials, having received more than $52 million from the energy and natural resources industries, according to the report. Texas Attorney General Ken Paxton has the second-most career contributions of statewide officials on the list, having received more than $5 million in career donations and led 12 attorneys general in a letter opposing the rule in June 2022.
Paxton said in the 2022 letter that the proposed rules “flagrantly exceed” the agency’s rulemaking authorities and the requirement for scope 3 disclosure “will not produce reliable information for investors.” The letter added that the SEC’s proposal for greenhouse gas emissions disclosures go beyond those required by the Environmental Protection Agency.
“The reliability of scope 3 emissions has not been firmly established. The requirement to disclose GHG emissions is, therefore, unreasonably broad,” Paxton wrote. “To the extent SEC has any legitimate reason to require any GHG reporting, it appears not to have properly considered less burdensome alternatives.”
Paxton also co-led 26 Republican state attorneys general, along with Utah Attorney General Sean Reyes, in a lawsuit opposing a Labor Department rule that allows retirement plan managers to consider ESG factors. Unlocking America’s Future tabs $122,000 in career donations to Reyes from the energy and natural resources sector.
The group said in a release that when the SEC releases its final rule in April, “we will learn whether the years-long, coordinated efforts by corporate polluters paid off.”
The findings come a month after Unlocking America’s Future launched with a more than $10 million campaign to counter Republicans’ attacks on the use of environmental, social and governance principles. Unlocking America’s Future, which does not have to disclose its donors as a 501(c)4, billed itself as a “nonpartisan group that will counter well-funded attacks” when it launched.
