Tester on SEC Climate Rule: Agency Shouldn’t Create ‘burdensome reporting requirements for production agriculture’

Senator secured commitment from SEC Chairman in September to protect farmers and ranchers

U.S. Senator Jon Tester today once again pushed the leader of the Securities Exchange Commission (SEC) to avoid taking any action that would lead to burdensome reporting requirements for family farmers and ranchers who are part of a supply chain for a publicly traded company as a part of its recently proposed “climate disclosure rule.”

“As we discussed during the Senate Banking Committee’s September 15th hearing, I am concerned about the negative effects that the Commission’s proposed rule for, “The Enhancement and Standardization of Climate-Related Disclosures for Investors,” may have on agricultural producers covered by a public company’s indirect “Scope 3” disclosure requirements,” Tester wrote in a letter to SEC Chairman Gary Gensler.

Tester continued: “I appreciate our discussions and your response that the Securities and Exchange Commission (SEC) does not intend for public companies to have an obligation to ask producers for information to estimate these emissions. However, the SEC should not take any action that may lead, intentionally or unintentionally, to burdensome reporting requirements for production agriculture when their goods are part of the supply chain for a publically traded company.”

Montana producers applauded Senator Tester’s aggressive and continued action:

“The farmer and rancher members of the Montana Farm Bureau Federation appreciate Senator Tester’s efforts to help the SEC understand our concerns with what could potentially be a far overreaching rule,” said Conrad farmer and Montana Farm Bureau Federation President, Cyndi Johnson. “Farmers and ranchers should not be wrapped up in regulation and red tape that is meant for publicly traded companies. Senator Tester is asking the right questions of the SEC and we thank him for his leadership and continued follow up with this well stated-letter.”

In September, Tester pressed the SEC Chairman in a Senate Banking Committee hearing about concerns he’d heard from ag producers across Montana that the agency’s “climate disclosure rule” could lead to burdensome paperwork and bureaucracy for family farmers and ranchers. During the hearing, Tester received a commitment from the Chairman that the rule would not include requirements for producers to report information to the SEC, and that public companies will be able to use an estimate and will not require the companies to collect any additional information from suppliers like family farmers and ranchers. During the hearing and in a separate conversation with Chairman Gensler, Tester emphasized the importance of the SEC addressing the comments they have received from agricultural producers and other stakeholders and making sure any final rule works for Montana.

In March, the SEC proposed a rule that would require public companies to provide certain climate-related financial data, and greenhouse gas emissions insights, in public disclosure filings. As part of the rule, companies would have to disclose emissions they are directly responsible for, as well as emissions from their supply chains and products if the company makes claims of reducing those indirect emissions.

As the Senate’s only working farmer, Tester continues to be Montana’s leading champion for Montana producers and fights tooth and nail to defend family farmers and ranchers from efforts by politicians in Washington DC to harm their bottom lines. Last year, Senator Tester killed a proposal to change the way taxes are paid on inherited assets, in particular eliminating the so-called “stepped up basis,” which would have had severe impacts on the ability of small ag producers to pass their farms, ranches, and small businesses on to the next generation.

You can read Tester’s full letter to Chairman Gensler HERE.