Republicans are supposed to be more of the “let the market take care of things” people. However, when it comes to an issue they don’t want to address at all, some of them are apparently even willing to make an attack on the financial market.
A key to a well-functioning market is the availability and sharing of information. It is one of the most basic and important assumptions behind market-driven policies.
Due to the impending (and already beginning) effects of climate change on our world, the Securities and Exchange Commission (SEC) recently decided that companies “must consider the effects of global warming and efforts to curb climate change when disclosing business risks to investors.”
However, at least one Republican in Congress is going out of his way (..well, has written a two-sentence bill) to try to stop this from happening.
It is really sad to see Congressmen so against protecting the natural world that sustains us that they will even weaken the market in order to stop this from happening.
Despite a group of 56 investment industry leaders with $2.1 trillion in assets applauding the SEC’s decision, a certain Senator John Barrasso from Wyoming thinks he knows better.
He introduced legislation on February 24 that would not allow the SEC to require that companies disclose their climate-related risks for investors.
Why is this against the whole purpose of the SEC?
Among other things, the SEC is set up to make sure investors receive financial and other important information regarding securities that are offered for public sale.
Climate change is an important issue for investors. That is very clear in the markets where they do have some knowledge about the link between different companies or industries and climate change.
“Alexander Bassen and Sebastian Rothe have found that carbon-intensive utilities fare worse on European stock markets than low-carbon utilities. That is, European investors reward low-carbon utilities,” Richard Caperton of Center for American Progress reports.
Similarly, in the US, “Goldman Sachs Sustain has found that carbon intensity is responsible for large proportions of the difference in stock valuations in certain U.S. industries such as airlines, mining, and utilities. Here again, investors are rewarding low-carbon companies.”
These are industries where investors have some knowledge about a company’s relationship to climate change. In industries where there is a significant but not well-known or obvious link to climate change (i.e. the food and beverage industry), investors want more information. They have a right to that information.
As the investors managing $2.1 trillion in assets write, “The SEC was founded on the principle that the purchase and sale of securities should be an honest bargain based on full and fair disclosure. The climate change disclosure guidance carries that tradition and legal requirement forward to a pressing challenge facing businesses in this century.”
Despite the economic crisis we are trying to climb out of, Barrasso and others are trying to debilitate the market and our future economy further.
The SEC and Congress, plain and simply, should not give in to or tolerate this attack on the US and the world economy.
Image Credit: talkradionews via flickr under a CC license