Skip to content
US Securities and Exchange Commission

Coalition Asks for Disclosure Rule on Companies’ Membership to U.S. Chamber as SEC Develops Climate Rule

Soyoung Ho  Senior Editor, Accounting and Compliance Alert

Soyoung Ho  Senior Editor, Accounting and Compliance Alert

The U.S. Chamber of Commerce has been effective in furthering the interest of businesses with its office across from the White House. One current important task is to water down the disclosure rulemaking related to climate change or any other environmental, social, and governance (ESG) issues.

The business association has had a lot of success representing Corporate America by at least moderating some regulations over the years. And on ESG issues, the U.S. Chamber has even conducted a survey and sent the results to the SEC on August 23, 2021, to make the case for flexible and scalable requirement. Most important of all, it should be firmly rooted in the concept of materiality. And if the U.S. Chamber is not satisfied with the final rule, which is likely a couple of years away, it will be ready to sue the SEC, according to a source close to the matter.

However, climate change has become one of the most important topics in recent years, and a coalition called Change The Chamber was established in June 2020 to defeat the business group’s goals.

The coalition comprises over 100 student and environmental groups, and they share the common goal of advocating for science-based climate legislation and changing the climate-lobbying of the U.S. Chamber.

U.S. Chamber is Not a Monolith

In a comment letter to the SEC, Change The Chamber said that it has conducted extensive research on the U.S. Chamber’s climate lobbying. The organization said the business organization is one part of a larger group of trade associations that lobby against science-based climate policy.

At the same time, the coalition said many of the Chamber’s member companies are seriously engaged in mitigating climate risk, and this is its plan of attack.

“The opposition by large, cross-sector trade associations, which claim to speak for the business community as a whole, is extremely problematic,” Aaron Edwards, a researcher for Change The Chamber, wrote to the SEC. “This comment springs from the observation of this misalignment. Companies are not required to disclose their membership in, or donations to, trade associations.”

He said that investor funds are used to pay these undisclosed donations.

“The commenter believes that the lack of disclosure around trade association membership creates a lack of key information about how investor funds are being used to oppose public policy measures that would curtail climate risk,” he said.

In particular, Edwards said the SEC should mandate public companies to issue yearly reports that audit the climate lobbying positions of all their trade associations. He wants the reports to include assessment of both how their trade association’s lobbying aligns with the goals of the Paris Agreement and how their trade associations’ climate lobbying specifically aligns with their company’s climate public policy position.

Edwards said that researchers looked at companies on the S&P 500 index to figure out which ones disclose their membership in trade associations and which ones have taken actions to mitigate climate risk in line with the goals of the United Nations Framework Convention on Climate Change (UNFCCC)—the parent treaty of the 2015 Paris Agreement.

Change the Chamber found that 116 of the S&P 500 disclose membership with the U.S. Chamber:

  • 49 of these companies declared support for the Paris Agreement.
  • 52 of these companies set an emissions target in line with the goals of the Paris Agreement.
  • 37 of these companies set an emissions reduction target that has been approved by the Science Based Targets Initiative.
  • 52 of these companies follow the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
  • 70 of these companies took one or more of the above actions.

The survey also found that 60 of the SP 500 disclosed membership with the National Association of Manufacturers (NAM):

  • 31 of these companies expressed support for the Paris Agreement.
  • 37 of these companies set an emissions target in line with the goals of the Paris Agreement.
  • 31 of these companies set an emissions reduction target that has been approved by the Science Based Targets Initiative.
  • 31 of these companies produce reports of climate risk indicators in line with the recommendations of the TCFD.
  • 42 of these companies have taken one or more of the above actions.

“These results show that, for both of the large, cross-sector trade groups, a clear majority of their membership is in favor of mitigating climate risk,” Edwards wrote.

With a Democratic majority at the SEC, it is likely the rules will be more stringent than the U.S. Chamber would prefer.

In the meantime, the commission is continuing to receive comment letters well-beyond the mid-June deadline, with the latest dated August 30.

As of September 2, there were 625 unique comment letters and 5,860 form comment letters.

The vast majority of the letters that are not from businesses do want some sort of standardized disclosure requirements.


This article originally appeared in the September 3, 2021 edition of Accounting & Compliance Alert, available on Checkpoint.

Subscribe to our Checkpoint Daily Newsstand email to get all the latest tax, accounting, and audit news delivered to your inbox each weekday. It’s free!

More answers