Proposed Climate Change Rules Reach to the Ranch

by Caren Cowan, Publisher, New Mexico Stockman & Livestock Market Digest

Climate change is being smashed in our faces every which way we turn. But who would have thought that the climate change policy would be making its way into your office?

That is just what’s fixing to happen. The Securities & Exchange Commission (SEC) is promulgating new rules that will require anyone trading on the Stock Exchange to provide certain climate-related information in their registration statements and annual reports. The proposed rules would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition.

The required information about climate-related risks would also include disclosure of a registrant’s greenhouse gas emissions, which have become a commonly used metric to assess a registrant’s exposure to such risks. In addition, under the proposed rules, certain climate-related financial metrics would be required in a registrant’s audited financial statements.

Your agricultural business doesn’t trade on the Stock Exchange, so where’s the problem?

The problem is that if you sell any product that ends up in the hands of any company that does trade on the Stock Exchange, that company is required to gather data from you regarding your climate-related risks as outlined above.

As the SEC explains it, investors need information about climate-related risks— and it is squarely within the Commission’s authority to require such disclosure in the public interest and for the protection of investors—because climate-related risks have presented financial consequences those investors in public.

Not everyone agrees with that statement and many believe that the SEC has gone well beyond its jurisdiction in requiring these disclosures. The Competitive Enterprise Institute and the Heritage Foundation are among them. Both groups have brought experts in who have developed extensive comments opposing the new regulations.

But you need to comment too. The comment deadline has been extended until June 17, 2022. Your comments may be as simple as you do not have the data to respond to requests for disclosure and/or that the profit margin for your ranching or farming operation does not allow for you to hire the expertise necessary to provide the data.

“The Enhancement and Standardization of Climate-Related Disclosures for Investors,” Release Nos. 33-11042, 34-94478 (March 21, 2022) scope and comment process for this release remains as stated in the original Federal Register notice of April 11, 2022. That Federal Register notice can

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be found at file:///C:/Users/caren/Downloads/SEC-2022-0494-0001_content.pdf . It is a mere 129 pages.

Comments may be submitted by any of the following methods:

Electronic Comments

• Use the Commission’s internet comment form ( https://www.sec.gov/rules/ submitcomments.htm ). • Send an email to rule-comments@sec. gov. Please include File Number S7-xx-xx on the subject line.

Paper Comments

• Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number S7-10-22. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method of submission. The Commission will post all comments on the Commission’s website ( https://www. sec.gov/rules/proposed.shtml ). Comments are also available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10 a.m. and 3 p.m. Operating conditions may limit access to the Commission’s Public Reference Room. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly.

The American Farm Bureau Federation (AFBF) joined 119 other organizations in writing letters to get the comment extension. AFBF says proposed rule could reach nearly every farmer and ranch in the nation. ▫