Toomey presses SEC for answers on climate, ESG agenda

The top Republican on the Senate Banking Committee is pressing the Securities and Exchange Commission (SEC) for more information about the agency’s climate change agenda.

In a letter to the SEC released Thursday, Sen. Pat Toomey (R-Pa.) asked the agency’s acting chief for a briefing on its plans for a new task force and enforcement priorities regarding climate-related financial risks.

“These announcements appear to presage major changes in longstanding practices on disclosure and enforcement matters at the SEC. Such changes would be premature,” Toomey wrote in a letter dated March 24 to acting SEC Chairwoman Allison Herren Lee, a Democrat.

“In order to better understand the scope and intention of this new task force and the SEC’s ‘enhanced focus’ on climate and ESG-related priorities, I am requesting a staff briefing on this subject by no later than the week of April 5, 2021,” he continued.

The SEC declined to comment.

Toomey and many Republican lawmakers have voiced opposition to the growing focus on climate-related issues among several federal financial regulators, including the SEC, Federal Reserve and Treasury Department. All three have taken steps in recent months to boost their oversight of and research into the financial risks posed by severe weather exacerbated by climate change and the ongoing shift to cleaner sources of energy.

The SEC has formed a task force focused on environmental, social and governance (ESG) issues and compliance with climate-related disclosures, and hired Satyam Khanna, a former commission and Treasury Department staffer, as the agency’s first senior policy adviser for climate and ESG.

Lee also announced that the SEC would take a closer look at its climate-related disclosure requirements and said the commission should also require new disclosures of political spending.

While Democrats and financial sector critics who’ve long called for such changes have praised the SEC, the agency’s GOP commissioners and Republican lawmakers have bristled at the moves.

“The SEC also should not use enforcement actions as a backdoor for imposing new regulations on ESG and climate change issues,” Toomey wrote.

The SEC is currently split between two Democratic commissioners — Lee and Caroline Crenshaw — and Republicans Elad Roisman and Hester Peirce. Gary Gensler, President Biden’s nominee to serve as the SEC’s chairman and fifth commissioner, is expected to be confirmed by the Senate.