Can the Regulators Advance Biden’s Climate Agenda?

Congress failed to help forward the president’s climate agenda. Susan Olson explains how the SEC and DOL are stepping up.

Congress’s failure to pass Biden’s Build Back Better Act proved an early setback in his climate agenda. The president now turns to the regulatory agencies to move the ball forward. Natixis government affairs expert Susan Olson walks us through efforts by both the SEC and DOL.

Highlights of the video include:

  • In March 2022, the SEC released a proposed rule requiring stock-issuing companies to standardize climate-related disclosures. Such disclosures would provide investors with important details to inform their decisions to buy or sell stock based on a company’s climate-related behaviors.
  • A major component of the SEC’s disclosure requirements is the categorization of a company’s greenhouse gas (GHG) emissions, which are grouped as Scope 1, 2, or 3.
  • Despite general support for the SEC’s proposal, critics claim the disclosure would burden companies with undue complexity and effort.
  • For the DOL’s part, they have issued a proposed rule for public comment to evaluate how climate-related financial risks impact various retirement plans. Similar to the SEC’s proposal, some argue that fiduciaries would be held to an unfair standard to determine the impact of climate risk on retirement savings.
  • Despite the regulators’ efforts, Congress is not off the hook as a bipartisan group of senators are working on a stand-alone climate and energy bill with both sides of the aisle putting forward their respective initiatives. Skepticism abounds, however, about a successful outcome in an election year.

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed are as of May 2, 2022 and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

The views and opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers, or any of its affiliates.

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