April 29, 2022

SEC Climate Change Release: Will More Time Help?

This week, a group of 36 trade and industry associations submitted a comment letter to the SEC requesting that Commission provide a substantial comment period for the climate change disclosure rule proposal “given the size, scope, complexity, and ramifications of the rule.” The participating associations represent companies in the oil and natural gas industry. Others have also jumped into the fray – in the past few weeks, a group of trade associations for the real estate and hotel industry and the American Petroleum Institute requested a 30-day extension, the American Exploration and Production Council requested a 45-day extension, the Society for Corporate Governance, the U.S. Chamber of Commerce, a group of insurance trade associations, a group of states and the Petroleum Alliance of Oklahoma requested a 60-day extension, the Independent Community Bankers of America and the Industrial Minerals Association requested a 90-day extension and the International Association of Drilling Contractors requested a 180-day extension.

Will the SEC extend the comment period in response to these requests? As the most recent extension request aptly points out:

The 39 days allotted for comment since the proposed rule was published in the Federal Register are woefully inadequate for the magnitude of this rule, which runs to 506 pages, contains 1,068 footnotes, references 194 dense academic and governmental reports, imposes a $10.235 billion cost on society, and seeks answers to 196 discrete questions. The public requires ample time to consider all the materials SEC has laid out in this rule in order to thoughtfully and thoroughly respond. Likewise, SEC has a statutory obligation to provide the public with a meaningful opportunity to comment. Thirty-nine days does not constitute a meaningful opportunity when there are so many wide-ranging economic and financial impacts from this rule.

But does the SEC care what commenters think? A 39-day comment period on a rule proposal of this significance does not signal that it does, and could only hurt the Commission’s position in the inevitable litigation that will follow adoption of the rules. In the meantime, I am going to keep going on the comment letters I am working on!

– Dave Lynn