The 2020 presidential primary campaign has most of the Democrat candidates competing for who can impose the most requirements upon corporations to disclose the threats their assets, operations and profits face from climate change (formerly known as “global warming”).
Except the risks – at least with specificity – aren’t defined.
What is a “threat” from climate change? An extensive list of societal ills have been blamed on global warming, so many that it can be argued that everythingbad is caused by it. Of course, that’s the brilliant intention of the alarmists – create an all-encompassing source of destruction that cannot be averted without their prescriptions for massive government intervention, wealth redistribution, and the affliction of anyone who is comfortable.
While all corporations are in the environmental left’s crosshairs, the major targets are the fossil fuel companies. If they can get CEOs and executive boards to cave to their demands to “disclose” the “risks” posed by unwieldy and uncontrollable “climate change,” then they’ve got them in the palms of their hands.
“Given the time horizon over which climate change could have an impact, it’s challenging to prove that any risk or uncertainty is material to a company in the present day,” said Keith Higgins, a former SEC director and now chairman of the securities and governance practice at Ropes & Gray LLP, to the Wall Street Journal.
Think about it – so much is said to be caused by changing temperatures (rising sea levels, hurricanes, floods, tornadoes, droughts, blizzards, polar vortexes, etc. – and those are just some of the meteorological ones) that no human effort could hope to disclose allof the potential threats. So if a corporation goes down the road of “disclosure,” they are bound to miss several that they omitted (in the eyes of the Greens), and open themselves to negligence lawsuits by left-wing activist shareholders and anyone else a favorable judge determines has “standing” to sue.
Thus it is no surprise the Big-Regulation Democrat candidates fall all over themselves to claim they will force Big Oil (and the rest of Big Corporate America) to include such disclosures in their financial reports. The tool they will use for their coercion is the Securities and Exchange Commission.
“Presidential hopefuls like former Vice President Joe Biden, Massachusetts Sen. Elizabeth Warren, Washington state Gov. Jay Inslee and former Texas Rep. Beto O’Rourke are all proposing plans to strengthen the SEC’s climate-related disclosure requirements,” Politico reported on Monday. “And other Democrats said it’s about time for the SEC’s regulators to take climate change more seriously.”
The news site said Biden and O’Rourke planned to force disclosure of “risks and the greenhouse gas emissions in their operations and supply chains.” Warren was said to require public companies “to disclose the volumes of their greenhouse gas emissions and the total values of their fossil-fuel related assets.” And Inslee’s entire campaign platform has been about climate change, so there’s a bottomless well of regulation he would impose.
It likely wouldn’t take long for a victorious Democrat to change sentiments on the five-member SEC board in favor of more rigorous climate change disclosure. No more than three Commissioners may be represented by a single political party at a time, each member’s term is five years, and a Commissioner’s term expires each year. So it would only take a year or two at most for SEC turnover to convert into a Democrat majority.
“The potential for an extremist ideologue Democrat in the White House weaponizing the SEC and overall corporate governance policies in the context of the environmental, social and governance suite of issues is quite a serious concern among publicly-held companies in the energy sector,” said Stephen Brown, principal at the energy lobbying firm RBJ Strategies LLC, to Politico.
Many corporations already include some disclosure language in their annual reports, even though it is just a recommendation by the SEC and not mandatory. For example, demonized oil company ExxonMobil offers the following in its most recent 10-K:
- “Due to concern over the risks of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions…Current and pending greenhouse gas regulations or policies may also increase our compliance costs, such as for monitoring or sequestering emissions.”
- “Our consideration of changing weather conditions and inclusion of safety factors in design covers the engineering uncertainties that climate change and other events may potentially introduce. Our ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of our robust facility engineering as well as our rigorous disaster preparedness and response and business continuity planning.”
- “Our Outlook [for Energy report] seeks to identify potential impacts of climate related policies, which often target specific sectors. It estimates potential impacts of these policies on consumer energy demand by using various assumptions and tools – including, depending on the sector, application of a proxy cost of carbon or assessment of targeted policies (e.g. automotive fuel economy standards).”
Exxon’s declaratory language regarding the issue goes into more detail than these samplings, but it’s not good enough for alarmist activist shareholders. They demand “data” from companies about emissions about anything and everything that could possibly (real or imagined) have an effect on the natural world.
“Investors are telling companies, ‘This disclosure is important to us — please explain why you did not disclose or please disclose your climate change impact,'” said Emily Kreps, global director of investor initiatives at CDP (formerly the Climate Disclosure Project), to CBS News.
Knowing the environmental left’s demagoguery of climate change and demonization of fossil fuels, they will not stop until they draw blood – and lots of money. The SEC is perhaps their strongest weapon of choice, and many of the Democrat candidates for president in 2020 want to give it to them.