West Virginia State Auditor joins call for changes to SEC environmental rule | News, Sports, Jobs

State Auditor JB McCuskey warned Thursday that a proposed rule by the SEC could damage that federal agency’s credibility with investors. (File Photo)

CHARLESTON – State Auditor JB McCuskey, West Virginia’s own securities regulator, is calling on the US Securities and Exchange Commission to reverse course on a proposed rule requiring companies to go into great detail on greenhouse gas emissions and other environmental issues. The State Auditor’s Office announced Wednesday it had filed a comment on the proposed rule, called “The Enhancement and Standardization of Climate-Related Disclosures for Investors.” The letter was sent to the SEC on June 14 and co-signed by Mississippi Secretary of State Michael Watson. The more-than-500-page rule would require companies to provide the SEC information on their direct and indirect greenhouse gas emissions and their climate-related risks. Opponents believe the proposed rule is far too broad and goes beyond the agency’s mandate to protect investors. Speaking by phone Thursday, McCuskey said the proposed rule politicizes the SEC and will sour the public’s trust in yet another institution, making the job of the State Auditor’s Office much harder.
“The Auditor’s Office is very fearful that by politicizing the Securities and Exchange Commission, our mission will be forever tarnished because the people of West Virginia will no longer trust that the information and the data that comes from SEC isn’t tarnished by the stink of Washington politics, “ McCuskey said. “It is our sincere hope that by stopping this step to add what is an inherently political metric into the SEC’s mission, we will be able to stop both Republicans and Democrats from ever using the SEC as a political football.”
McCuskey said the proposed rule would be a slippery slope, opening the door for the SEC to require other non-financial information while making it more difficult for investors to obtain the financial information needed to make smart investments.
“The real danger in falling down the slope is that we have a mission to protect investors and to ensure that they have quality information when they make investment decisions,” McCuskey said. “If they can no longer trust that the SEC is nonpartisan and down the middle, that mission is incomplete before it even starts. That matters from the left and the right, and one of our main goals is to protect the integrity of the SEC, along with its reputation amongst investors, as the singular place to find accurate investment data and information. “
McCuskey is one of several state officials in the Board of Public Works taking a stand against a growing trend by the government and companies toward ESG policies – Environmental Social Governance. Attorney General Patrick Morrisey announced last week that West Virginia and 23 other states also filed formal comments with the SEC raising concerns about the proposed rule. State Treasurer Riley Moore and other state treasurers and financial officers have opposed pressure on banks and financial institutions via ESG policies to boycott investment in the fossil fuel industry, including threatening to pull state deposits from these institutions. Opponents of ESG policies, such as McCuskey, see them as a back-door way of regulating the fossil fuel industry, going around Congress. McCuskey said the SEC rule would mostly harm smaller companies that do not have the money or legal teams in place to maneuver around the rule, and that enforcement of the rule would require the SEC to hire staff and expertise it currently doesn’t have.
“What you’re going to find is that companies who are large and have well established legal and accounting teams will be better prepared to comply with this giant bureaucracy,” McCuskey said. “The other huge issue here is that the SEC isn’t equipped to even analyze or collect this data. How much is it going to cost for them to become a climate change data expert center? My guess is that they’re going to have to hire thousands of people that have little or no experience in finance and are not truly designed to effectuate the SEC’s mission. “
The State Auditor’s Office manages the Securities Commission, which regulates securities offerings, commodities, time-shares, broker dealers, investment advisers. The commission was created in 1925. Deputy State Auditor Lisa Hopkins serves as the chair of the commission and also serves as president of the National Securities Commissioners Association. Steven Allen Adams can be reached at [email protected]

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