This is the Cato Daily Podcast for Tuesday, April 19th,

2022. I'm Caleb Brown. In the interest of protecting investors,

the Securities and Exchange Commission has a new rule now in process numbering some 500 pages to compel

companies to tell investors about their climate change policies and impacts.

But do investors want that information and how much of that data is either accurate or actionable or comparable across firms and industries?

Cato's Jennifer Schullp comments.

How does the SEC interpret its mandate and has it changed much since the creation of the agency?

The SEC generally has interpreted its mandate to be a three-part mission, to protect investors, to maintain fair and orderly capital markets, and to facilitate capital formation.

That has stayed the same,

but what hasn't stayed the same is kind of the meanings of each of those terms

and how broadly or narrowly the SEC views investor protection and maintaining fair markets.

I was about to say fair markets seems to be the kind of phrase that you could drive a truck

through if you had to.

Investor protection is exactly the same way.

There's a lot of play in the joints about how the agency interprets its mission even with a standard mission statement.

So how, what authority does the SEC rely on in releasing a disclosure

requirement for companies related to global warming?

So the SEC is relying on a couple of different places.

One is its investor protection mandate and saying that investors are interested in learning about companies

climate change risks. But more generally the SEC on this rule has relied on even broader powers to provide information for investors

and in the public interest. Talk about a mandate that you can drive a truck through.

All right, so when they issue a disclosure requirement for publicly held companies to make investors aware of their climate change policies or their impacts.

...