Climate Change Weekly #430: SEC Abandons Mission, Goes Woke on Climate Change

From Environment & Climate News



  • SEC Abandons Mission, Goes Woke on Climate Change
  • Podcast of the Week: Gas Prices Skyrocketing, Energy Crisis Incoming?
  • China Confirms Continued Coal Expansion
  • No Net Emissions from Deforestation
  • Climate Comedy
  • Video of the Week: The Surface Temperature Record Is Flawed
  • BONUS Video of the Week: Energy Explained ep1: Oil and Gas
  • Recommended Sites

SEC Abandons Mission, Goes Woke on Climate Change

With Democrat appointees at the helm and the Biden administration’s encouragement, the supposedly independent U.S. Securities and Exchange Commission (SEC) has gone full-on woke on climate change.

Stepping well outside its legal mission to protect investors from fraud and the markets from insider trading and manipulation, the SEC has decided it knows what the managers of publicly traded companies, portfolio and fund managers, and investors should care about. Forget about making profits for companies and their shareholder-owners, a company’s financial condition and prospects based on business and market measures, or providing a secure, comfortable retirement for pensioners. According to the SEC, all of that should take a back seat to fighting climate change.

The SEC has no particular expertise in climate science, and as far as I’ve been able to ascertain, there is no evidence it is staffed by people known to be able to predict the future in general, or even future weather in particular. Nonetheless, the SEC is taking it upon itself to dictate to investors and businesses that they must account for climate change, based on the commission’s opinion that it  affects every corporation’s business prospects and that investors should know about it.

The SEC’s proposed rules would require publicly traded companies to track and report on the greenhouse gas emissions resulting from their own operations and those of companies in their supply chain and the electric utilities that supply them power. In addition, companies will have to report on how climate change is affecting their businesses now, how it is likely to affect them in the future, and what they are doing in response, including steps they are taking to reduce non-toxic greenhouse gas emissions.

These rules will take hundreds of millions, possibly billions, of dollars away from businesses’ core operations, to carry out the SEC’s mandate to predict future climate to account for its fiscal effect on business operations and act as their brothers’ keepers by tracking their power companies’ and suppliers’ emissions as well as their own. Where are all the oracles, seers, and carbon accountants companies will have to hire to tell the future and audit their own and other companies’ expected emissions?

Much of the clothing sold by large, publicly traded retail chains and the electronics sold by publicly traded department, electronics, and cell phone stores and outlets is manufactured by overseas companies and shipped using foreign-registered ships. The sources for these items are not under the purview or control of the SEC and are unlikely to waste money tracking carbon dioxide emissions from their production activities, much less from the source of their electricity and supply vendors just because the SEC wants their corporate American customers to waste resources tracking such emissions.

What about incorporated fast food giants and grocery stores? Regardless of whether their beef, chicken, pork, and seafood, the wheat that goes into their buns, and the vegetables and fruits they use or sell come from domestic producers or foreign sources, the producers are often going to be relatively small, unincorporated operations, not bound by the SEC’s mandate. That will complicate the corporations’ supply chain reporting.

The reports could therefore be woefully incomplete, opening the companies up to SEC investigations for lack of compliance and transparency, and to activists’ protests or lawsuits for inadequate or incomplete reporting. Alternately, the corporate behemoths might attempt to force their foreign manufacturers and domestic or foreign farmers and ranchers to monitor or report their carbon emissions if they want to continue doing business with the corporate giants. The latter is what I expect the SEC wants the big companies to do: throw their financial weight around to make small producers comply with the Biden administration’s climate goals.

It may not be so easy. The producers could tell their corporate SEC climate overlords to take a flying leap, selling their goods elsewhere, such as burgeoning markets in China, India, and Brazil. They could sell to countries where regulators, to the extent they exist at all, are more focused on helping companies make a profit and create jobs for their people than obsessing over distant, unknowable, and probably unwarranted climate fears. That would raise prices of all these goods in the United States by reducing supplies, further fueling inflation, which is already out of hand. In addition, we can expect the current U.S. supply chain crisis and increasingly empty shelves to look great by comparison with what’s to come.

Alternatively, the overseas and small domestic producers could attempt to track their emissions. Doing so, however, would add to their costs, and those added costs would certainly be passed on to consumers in the form of higher prices, just as the higher energy costs we are currently experiencing primarily because of Biden’s climate policies are responsible for a large portion of today’s high inflation rate and rising consumer prices.

Under either scenario, these policies will harm consumers. They will also harm investors, pension funds, and retirees—the very groups the SEC is supposed to be protecting.

The factors likely to effect materially the success or failure of publicly traded companies are best known to the officers and managers of the firms and funds themselves, not the SEC, other regulatory agencies, politicians, or self-appointed stakeholders, including climate activists, not actively involved in the relevant business.

The effects of climate change 20, 30, 50, or 100 years from now are unknown and unknowable. The projections of climate-simulating computer models of future conditions cannot be trusted. They have consistently overstated past and present temperatures, the most basic projections they have to make. The models have also consistently misidentified various climate conditions and weather events. Any projections made by climate modelers should be taken with a huge amount of salt.

Although private companies and businesses may be formed for any number of nonbusiness-related reasons unique to their owners’ personal desires and proclivities, publicly traded companies are formed to make a profit for their owners, although the managers may also list other reasons for a company’s formation in their statements of incorporation and disclosures. Accordingly, the managers of publicly traded companies and funds should endeavor to maximize profits for their investors.

Pension fund managers typically have legal fiduciary responsibilities to do just that, not to undertake investment decisions based on nonbusiness considerations with a high likelihood of reducing portfolio returns. The politics of a company’s or a fund’s managers should not enter into its business or investment decisions, unless the mangers explicitly state in their articles of incorporation and public disclosures that business and investment decisions will be driven by a particular ideological point of view or set of political concerns. Many or most investors will wisely avoid such funds.

If regulators, politicians, and activists want a company or fund to consider climate change risks, effects, and opportunities in its business and investment decisions, they can purchase stock or bonds issued by the company, as every other investor does. Then, at annual board meetings or other periodic company events they can express their desires as co-owners. They can try to convince company or fund managers to consider potential climate change risks and rewards and monitor and reduce their greenhouse gas emissions.

Failing at that, they can introduce climate-related resolutions, offer like-minded candidates for the board of directors, and try to convince a majority of stock owners to support their resolutions, directives, and slates of candidates. Thousands of climate-related resolutions, and candidates for board positions focused on climate concerns, have been offered over the past few decades. Most have been soundly rejected by investors. This, not probably illegal SEC mandates, is the appropriate way for companies and funds to take climate concerns seriously.

As the SEC itself notes, many businesses are already tracking their carbon dioxide emissions and forecasting the effects of climate change on their operations. Other companies are choosing to ignore emissions or climate change as a business factor. They should be allowed to make that choice. Which course of action is better for any particular company’s profitability and ongoing business operations? I don’t know, and neither does the SEC.

Portfolio fund managers and others concerned about climate or sustainability matters can form their own companies and funds, complete with public stock offerings, to compete with the businesses they believe are not taking climate change concerns seriously enough. Thousands of such green companies and funds have been formed. This lets people express their concern for the environment directly through their purchases and investment decisions.

The SEC’s role in these matters should be limited to ensuring “truth in advertising”—a policing function. The SEC should not attempt to develop or enforce uniform standards defining what it means for a company to take climate seriously. Instead, the SEC should simply require transparency from those companies and funds that profess to be “green,” climate-friendly, or committed to reducing their energy use and greenhouse gas emissions as a business strategy and a way to attract investors. In publicly available documents and disclosures, the companies and funds should be required to state specifically what practices they are undertaking to respond to climate change and how and on what timeline their efforts to reduce energy use and greenhouse gas emissions should be judged.

In addition to ensuring the transparent disclosure of allegedly climate-friendly practices and operations, the SEC should routinely monitor and police businesses claiming to embrace “green” policies, as they do with other promises businesses make to investors. The SEC should also respond to complaints from investors about companies failing to carry out their mission as stated and, working with the Department of Justice, ensure the companies’ officers, employees, and investors are not involved in or undertaking illegal business practices such as insider trading.

The SEC has no expertise in climate change and has not shown any ability to predict the future reliably. There is no nonpolitical justification for the SEC to require businesses to account for their climate risks, much less those of their business associates. The SEC should stick to regulating insider trading and false business claims and leave decisions about how to maximize business prospects in the face of potential but unknowable climate change to the owners and managers of those businesses.

SOURCES: Wall Street JournalCNBCU.S. Securities and Exchange CommissionJD Supra

Check Out All Our Presentations in Scotland

Podcast of the Week

The Securities and Exchange Commission, ignoring its legal mandate to ensure corporate transparency, accurate reporting, and the prevention of fraud and insider trading, has proposed rules mandating every publicly traded corporation adopt woke climate standards and goals accounting for the carbon dioxide emissions throughout its supply chain. Then, companies need to set goals to reduce emissions.

The Free Enterprise Project’s Scott Shepard points out this has nothing to do with what is best for businesses to flourish, make profits for business owners, or even investors, but everything to do with forcing the mission to fight climate change on the economy. The SEC has gone full on political in the remaking of America’s market economy into one controlled by authoritarian elites.Subscribe to the Environment & Climate News podcast on Apple PodcastsiHeartSpotify or wherever you get your podcasts. And be sure to leave a positive review!

China Confirms Continued Coal Expansion

At a mid-March meeting of China’s parliament, the National People’s Congress committed to making full use of coal, both domestically produced and imported from abroad, to keep energy prices low and power supplies reliable to promote economic stability.

Chinese President Xi Jinping reassured the assembled representatives, especially those from Inner Mongolia, its biggest coal-producing region, that China “could not part from reality,” that the country is “rich in coal, poor in oil and short of gas.”

Commenting on what this announcement means for Western countries committed to ending the use of coal to help reduce carbon dioxide emissions to fight purported climate change, Clarice Feldman writes in The Pipeline,

The joke’s on you, suckers: as the United States and Europe struggle with energy shortages because they’ve restricted the use and production of conventional fuels, China ups its use of coal, doubtless laughing at the western idiots who bought the disinformational “climate change” hoax.

SOURCES: The PipelineReuters

Heartland’s Must-read Climate Sites

No Net Emissions from Deforestation

New research published in the journal Nature shows deforestation is not causing a net increase in carbon dioxide.

A team of researchers from universities and research institutes in the Netherlands and the United States examined proxy data to account for the fraction of carbon dioxide emissions related to land use, particularly the effects of deforestation and wildfires.

Their research shows that although emissions from deforestation have increased since 1958, the share of carbon dioxide attributable to deforestation and other land use changes has declined by 0.014 ± 0.010−1 per decade due to improved uptake of emissions by the land and oceans from systemic factors such as forest expansion and general global greening. Nature has more than kept pace with growing emissions from land use changes. It appears the land and oceans’ abilities to remove and store carbon has become more efficient over time. The increasing uptake and storage of emissions was especially acute from the 1960s through the 1980s, slowing in recent decades.

Guido van der Werf, a professor at the VU University of Amsterdam, who set up the study,  specializes in the study of the global carbon cycle. Van der Werf says although we can’t know whether the Earth and seas will keep up with increases in emissions from land use changes and deforestation in the future, “What we can mainly prove is that the worst nightmare scenarios of an impaired carbon sink have not yet materialized and that the news is not quite as bad.”

SOURCES: Phys.orgNature (behind paywall)

Video of the Week: The Problem With Climate Models

Governments across the globe reference the results of numerous climate models to defend the need for centralized climate action. This is problematic. The majority of climate models often overpredict the rate and degree of warming the Earth will undergo, resulting in policies that are wholly unnecessary while infringing upon economic and individual liberty.

Steve Milloy, Anthony Watts, Linnea Lueken, and Andy Singer discuss the climate model issue in episode 10 of The Heartland Institute’s of Climate Change Roundtable, live-streamed every Friday at noon CT.

BONUS Video of the Week: Energy Explained ep1 – Oil and Gas

Energy is the lifeblood of the modern world. Yet, so few people understand the process behind turning on the lights, fueling a car, and getting goods delivered across the globe. That’s why The Heartland Institute’s Linnea Lueken created our new series “Energy Explained.”

Oil and gas take the center stage for the inaugural episode. Learn about their history, price, and how the modern world would cease to function without oil and gas.

Climate Comedy

via Comically Incorrect

Recommended Sites

Climate at a GlanceClimate Realism
Heartland’s Climate PageHeartland’s Climate Conferences 
Environment & Climate NewsHealth Care News
Watts Up With That (Anthony Watts)Heartland’s Energy Conferences
Junk Science (Steve Milloy)Climate Depot (Marc Morano)
CFACTCO2 Coalition
Climate Change DispatchGlobal Warming Policy Forum (Benny Peiser) (Cooler Heads)Climate Audit
Dr. Roy SpencerNo Tricks Zone
Climate Etc. (Judith Curry)JoNova
Master ResourceCornwall Alliance (Cal Beisner)
International Climate Science CoalitionScience and Environmental Policy Project 
Bishop HillGelbspan Files
1000Frolley (YouTube)Climate Policy at Heritage
Power for USAGlobal Warming at Cato
Science and Public Policy InstituteClimate Change Reconsidered NIPCC)
Climate in Review (C. Jeffery Small)Real Science (Tony Heller)
WiseEnergyC3 Headlines
CO2 ScienceCartoons by Josh

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John in Oz
April 1, 2022 7:02 pm

Re:SEC Abandons Mission, Goes Woke on Climate Change
Perhaps companies should add the risks and additional costs to the business from SEC rulings. It would appear that this will be a major factor that investors need to know about.

As with scary climate prognostications, a company could make up all sorts of ‘scenarios’ about possible future SEC rulings – what’s good for the goose is good for the gander.

Would the SEC have accurate information for their own greenhouse gas emissions as they appear to be wanting to be an input to every company within their purview?

Michael Elliott
Reply to  John in Oz
April 1, 2022 7:26 pm

Can such nonsense be appealed
against , perhaps a class action against the Government Department.

Companies must come together on this one. So why, is it policy from the top, or just a case of some nutty Green in the SEC.

Use paid advertising to let the public know that they will suffer re the extra cost to the company in doing business.

Michael VK5ELL

Ron Long
Reply to  John in Oz
April 2, 2022 3:42 am

This dastardly nonsense makes choosing an Investment Adviser even more important.

Richard Page
Reply to  John in Oz
April 2, 2022 9:47 am

Looks like they’re creating jobs for ‘like-minded’ people, then finding work for them to do. If they had more employees than jobs they should really have begun to scale back not expand.

April 1, 2022 7:34 pm

ESG, a requirement for One World Government, Agenda 21, The Great Reset, or any other Marxist “solution”. There should be a serious backlash when the people understand the ESG imperative.

Old Man Winter
Reply to  markl
April 1, 2022 9:16 pm

You’re spot on. Like the SEC proposal that claims to be for our benefit
gives them more power to control & monitor people & groups (via Scope 3),
like the truckers in Canada. The digital dollar will have the same purpose.
Klaus Schwab of the World Economic Forum (WEF) praised True-Dope for
that. He also said this in June 2020:

“the world must act jointly & swiftly to revamp all aspects of our societies &
economies,from education to social contracts & working conditions. Every
country, from the United States to China, must participate, & every industry,
from oil & gas to tech, must be transformed. In short, we need a ‘Great
Reset’ of capitalism.”

ESG- Environmental, Social, Governance score- like they have in China

Everything they’ll do will be for THEIR benefit not ours.

Doc Chuck
Reply to  Old Man Winter
April 1, 2022 11:13 pm

Time for a name change to ‘Insecurities Exchange Commission’! What was once occasionally referred to as ‘cut throat’ in the vigorous competition among companies to meet consumer expectations now takes on a whole new meaning as applied to each company cutting its own throat bowing to utterly specious demands of outsiders with interests entirely unrelated to those having some vested interest in the success of the company’s operations.

Reply to  Old Man Winter
April 2, 2022 12:30 am

If there are to be changes on a worldwide scale towards total renewables, it will firstly need a massive increase in the use of fossil fuels and mining, in order to make all the solar and wind generators required to ‘save the world’.
These generators are unable to provide enough power to reproduce themselves let alone provide spare energy for people to use.
I.e. it will require a return to a Mediaeval lifestyle with the serfs down below and the WEF and SEC up in the castle telling them what to do.

April 1, 2022 7:41 pm

re SEC absndons mission: I look forward to wind farm installers having to report on their greenhouse gas emissions.

April 1, 2022 7:47 pm

On top of all that, whatever the SEC does is going to make no difference whatsoever.

Richard Page
Reply to  Tom.1
April 2, 2022 9:50 am

Really? How easy is it to reduce a federal employee workforce? How easy will the next Republican government find it to scale down a bloated bureaucracy? You’re just assuming that the SEC stated goals are their actual goals.

April 1, 2022 9:25 pm

Before we know it, the supposedly independent SEC will be taking sides on things like whether or not the earth is flat; or whether the moon is made of cheese or not. Somebody needs to tell them that ‘independent’ means they have to remain neutral on all scientific matters.

Reply to  TheFinalNail
April 3, 2022 3:02 am

Flat-eathers get a raw deal. Where is the balanced reporting? There’s your woke right there.

Joao Martins
April 2, 2022 3:24 am

Please, see the very interesting (as usual) article by David Wojick in CFACT:

ht tps: //www. cfact. org/2022/04/02/energy-transition-disruption-might-bite-the-sec/?utm_source=rss&utm_medium=rss&utm_campaign=energy-transition-disruption-might-bite-the-sec

He suggests that companies can use the SEC imposition as an opportunity to show the full extent of the green madness.

Gordon A. Dressler
April 2, 2022 8:12 am

Well, to paraphrase the famous words of a former Senator, I call for an independent investigation into the SEC itself to discover “what did they know about climate change and when did they know it.”

Moreover, what actions did the SEC take, or not take, since first hearing the term “climate change”?

We, US citizens, must discover the full extent of SEC involvement in this matter, particularly if they have all along been part of an illegal cover-up activity, such as has been claimed for Exxon.

Matt Kiro
April 2, 2022 8:36 am

Remember when you would be with your grandparents house and they would tell you how the storms and blizzards we’re worse in his day?
Now we have people telling us it’s gonna be worse in the future, when they can’t even show us where the climate has changed in the last fifty years.

April 3, 2022 6:50 pm

In the late 1990s, the SEC staff hectored companies to disclose their Y2K risks, and, of course, at the turn of the millennium, absolutely nothing happened. The SEC should stick to what it knows about and ignore the whining activists who want disclosure rules to dictate normative behavior.

Reply to  RebeLawyer
April 3, 2022 6:56 pm

It is hard to know if the heated concerns about Y2K led to enough preventative measures to mitigate harm or if the concern was completely overblown.

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