February 3, 2010

WASHINGTON -Financial Services Committee Ranking Member Spencer Bachus wrote to Securities and Exchange Commission (SEC) Chairman Mary Schapiro opposing the rush to judgment in issuing  guidance that requires publicly traded companies to assess and disclose the impact of climate change on their financial condition.  In the letter, Bachus urged Chairman Schapiro to focus on initiatives that protect investors and restore confidence in our capital markets.

"The SEC's recent decision to issue interpretive guidance requiring issuers to specifically disclose the impact that climate change may have on their financial condition raises very serious concerns.  With legislative progress on climate change having stalled, this guidance suggests an attempt by the SEC to promote a political agenda through regulation.  The guidance reaches beyond the SEC's expertise and will impose potentially significant compliance costs on issuers with little apparent benefit to investors," Bachus said.

"Further, this interpretive guidance is a clear departure from the SEC's core competencies.  Attempting to address climate change through the securities laws seems particularly ill-advised at a time when the SEC's limited resources should be focused on improving its inspection program for registered investment advisers; hiring and retaining a highly qualified staff; and implementing the Inspector General's recommendations to prevent another Madoff-like Ponzi scheme," Bachus said.  

Specifically, Ranking Member Bachus requested that Chairman Schapiro provide answers to 11 questions including, whether the White House asked the SEC to pursue this guidance; when the Division of Corporate Finance was directed to draft the climate change guidance; why the draft was not made public prior to the Commission's open meeting; whether the Commission performed an economic analysis prior to issuing the guidance; and what specific examples the SEC received that could be construed as inadequate climate change disclosure.

Click here to view a copy of the letter.