Manchin Joins Republican Effort to Overturn SEC Climate Disclosure Rule

Senator Manchin's support for overturning SEC's climate disclosure rule could have significant implications for corporate transparency and climate action.

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Nasiru Eneji Abdulrasheed
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Manchin Joins Republican Effort to Overturn SEC Climate Disclosure Rule

Manchin Joins Republican Effort to Overturn SEC Climate Disclosure Rule

Senator Joe Manchin, a Democrat from West Virginia, has announced his support for a Republican-led effort to overturn a new Securities and Exchange Commission (SEC) rule requiring public companies to disclose climate-related risks. The rule, which was finalized by the SEC in March 2024, has faced opposition from Republicans and some business groups who argue it places an undue burden on companies.

Under the new SEC rule, publicly traded companies would be required to disclose their greenhouse gas emissions, as well as any climate-related risks they face, such as potential impacts from extreme weather events or the transition to a low-carbon economy. Supporters of the rule, including many environmental groups and institutional investors, contend that this information is necessary for investors to make knowledgeable choices and for the market to correctly value climate risks.

However, Republicans in Congress have introduced a resolution under the Congressional Review Act to overturn the SEC climate disclosure rule. The resolution has already passed the House of Representatives and is now being considered in the Senate. With Manchin's support, the resolution is more likely to pass the Senate and be sent to President Biden's desk.

Why this matters: The fate of the SEC climate disclosure rule could have significant implications for how companies address and report on climate risks. If the rule is overturned, it could set back efforts to improve transparency around climate-related financial risks and slow progress on corporate climate action.

In a statement explaining his position, Manchin said, "I have always supported transparency in our markets, but this rule goes too far. It would impose significant costs on companies and could put American businesses at a competitive disadvantage." Manchin's support for the resolution is notable given his position as a moderate Democrat who has often been a key swing vote in the Senate.

The SEC has defended the rule, arguing that it is necessary to protect investors and maintain fair and efficient markets. In a statement, SEC Chair Gary Gensler said, "Investors are demanding more information about climate risks, and this rule will help ensure they have access to consistent, comparable, and decision-useful information."

The resolution to overturn the SEC climate disclosure rule faces an uncertain future. If it passes the Senate with Manchin's support, it would still require President Biden's signature, who has prioritized tackling climate change as a key goal of his administration. The White House has not yet indicated whether Biden would veto the resolution if it reaches his desk.

Key Takeaways

  • Sen. Manchin supports GOP effort to overturn SEC climate disclosure rule
  • Rule requires public companies to report greenhouse gas emissions, climate risks
  • GOP introduced resolution to overturn rule, which passed House, now in Senate
  • Manchin's support makes Senate passage more likely, but Biden may veto
  • Overturning rule could set back corporate climate transparency and action