API calls on SEC to rethink climate-related reporting rules

The American Petroleum Institute (API) has issued comments on the U.S. Securities and Exchange Commission’s (SEC) proposals for climate-related disclosure rules.

“Optimizing and Standardizing Climate-Related Disclosures for Investors”

In its comments, API reiterated its support for timely and accurate reporting of greenhouse gas (GHG) emissions from all emissions sectors of the economy to address climate change risks through market-based solutions and appropriate government action.

However, the broad disclosure requirements of the proposed rule would impose past costs on companies and could discourage them from taking action, such as setting greenhouse gas emission reduction targets.

Amanda Eversole, API Chief Support Officer said, “The SEC’s proposed disclosure rule is a solution in search of an information problem that doesn’t exist. For more than a decade, our industry has been a leader in providing climate-related information, and we continue to improve the consistency and depth of that reporting in close collaboration with investors and other stakeholders,” adding, “Ironically, the SEC’s prescriptive and inflexible proposal would likely lead to more confusion than clarity among investors, while imposing historic costs on companies and their shareholders. We respectfully urge the SEC to rethink its approach.”

In its comments, API stated that the proposed rules are unlikely to achieve the SEC’s goal of providing investors with more consistent, comparable, and reliable data and urged the SEC to consider alternative approaches before finalizing rules.

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