Statements on Introduced Bills and Joint Resolutions

Floor Speech

BREAK IN TRANSCRIPT

Mr. REED. Mr. President, today I am introducing legislation to require the Securities and Exchange Commission, SEC, to update its industry guides for oil, gas, and mining companies.

In November 2015, Peabody Energy agreed to provide comprehensive SEC disclosures about climate change risks facing the company when it settled charges of misleading investors. The company executed this settlement with the New York Attorney General after an investigation discovered that Peabody Energy ``repeatedly denied in public financial filings to the SEC that it had the ability to predict the impact that potential regulation of climate change pollution would have on its business, even though Peabody and its consultants actually made projections that such regulation would have severe impacts on the company.''

Unfortunately, it appears that the SEC had no role in this settlement, in which Peabody Energy agreed to amend its SEC disclosures, admitting that ``concerns about the environmental impacts of coal combustion . . . could significantly affect demand for our products or our securities.''

It is clear that the SEC needs to do more when it comes to critically reviewing the disclosures being filed by publicly traded companies, but it is also clear that the SEC's industry guides for oil, gas, and mining companies should be updated to reflect the growing risk of climate change to these companies. By so doing, the investing public can access the material information necessary to make informed decisions when investing in these types of companies. Indeed, it is for this reason that the SEC has established industry guides for certain industries with complex financial and non-financial data.

These disclosures are important to investors, such as Allianz Global Investors, which is a global diversified active investment manager with nearly $500 billion in assets under management. Allianz has specifically called for ``achieving better disclosure of the effects of carbon costs on the Oil & Gas companies.''

In updating the industry guides for oil, gas, and mining companies, my legislation would direct the SEC to work with the SEC's Investor Advisory Committee. This Committee was established by the Wall Street Reform and Consumer Protection Act to advise and consult with the SEC on regulatory priorities, the regulation of securities products, trading strategies, fee structures, disclosure effectiveness, and on initiatives to promote investor confidence and the integrity of the securities marketplace.

I thank Ceres for their support, and I also thank Representative Cartwright for introducing companion legislation in the House of Representatives today. I urge our colleagues to join us in supporting this legislation. ______

BREAK IN TRANSCRIPT

Source