AFPM questions SEC proposal’s broader disclosure requirements

The American Fuel & Petrochemical Manufacturers questioned whether it would be appropriate for the US Securities and Exchange Commission to mandate disclosure requirements for environmental, social, and governance matters, particularly related to climate change, for publicly traded companies.

“We think it would be a mistake to politicize decades of settled legal precedent and regulation by mandating reporting of speculative environmental or social issue information in SEC filings,” AFPM Pres. Chet Thompson said on July 25 after the association filed comments regarding SEC’s Concept Release for Business and Financial Disclosure under Regulation S-K.

“The existing requirements are adequate for addressing the issues that are fundamental for financial investors and securities markets and mandating the disclosure of immaterial, speculative matters, would not be in shareholders’ best interest,” Thompson said. “Requiring a company to disclose social and environmental matters that are not material or sufficiently certain would effectively force companies to support social and environmental policy agendas that lie outside the SEC’s authority.”

SEC’s Apr. 13 Concept Release explores whether Regulation S-K remains a sound structure for ensuring adequate business and financial disclosures to investors, AFPM said. Additionally, it asks whether parts of the regulation have become unnecessary and whether additional disclosures are needed to support the integrity of securities markets, build investor confidence in these markets, and support capital formation in the market.

“AFPM believes it is important to maintain the integrity of the nation’s longstanding corporate disclosure laws, which have enjoyed bipartisan consensus, regardless of the political party leading the SEC,” Thompson said. “We hope the SEC carefully considers the implications of changing mandatory reporting requirements, particularly in relation to social and environmental issues.

“Any changes to Regulation S-K should focus on maximizing shareholder benefits and should not risk more than 80 years of federal laws, regulations, and court decisions governing corporate disclosure,” he said. “We support keeping nonmaterial information separate from what is material and relevant to a company’s financial profile.”

Contact Nick Snow at

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