SEC Made ‘Outrageously’ Hard Climate Proposal, Ex-Director Says

The SEC’s climate disclosure plan would bring “outrageously” complicated, expensive and hard rules for companies to follow, a former senior SEC official said Wednesday.

The Securities and Exchange Commission is looking to give companies a lot of new reporting requirements under the March proposal, said Meredith Cross, who served as director of the agency’s Division of Corporation Finance in the Obama administration. The proposal would require companies to report on their greenhouse gas emissions and make other disclosures about how climate change affects their businesses.

“A lot of people wrote in and said, ‘Start over,’” Cross, a Wilmer Cutler Pickering Hale and Dorr LLP partner, said at a Practising Law Institute securities conference. “This is too hard.”

• Cross led the SEC’s Division of Corporation Finance under former Chair Mary Schapiro, a Barack Obama appointee. That unit is responsible for reviewing corporate disclosures, including the expected climate reporting rules.
• The SEC has received thousands for comments for and against the proposal. Republican commissioners Hester Peirce and Mark Uyeda have raised concerns about increased compliance costs for companies.
• Agency Chair Gary Gensler has said investors need to have consistent and comparable environmental, social and governance disclosures from companies. Final climate reporting rules are expected early next year.