Tag Archive for: securities and exchange commission

KEVIN MOONEY: Biden Admin’s New Climate Rules Could Mean Big Payday For His Buddies, Burden For American Businesses

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In a setback for former government officials and attorneys poised to cash in on proposed climate disclosure rules, the Securities and Exchange Commission continued to kick the ball down the road last year.

Many of the objections raised in public comments revolve around so-called Scope 3 emissions that are not directly produced by companies and instead result from what occurs “upstream” and “downstream” of a company’s activities. That’s a problem because if the SEC rule is finalized the commission would effectively extend its jurisdiction to include private companies that transact business with public firms registered with the SEC.

There’s a strong case to be made that under this scenario the commission would be overstepping its authority, which would help to explain why the SEC has continuously slow-walked its proposal.

But there’s additional intrigue involving a somewhat unheralded “carbon accounting” firm equipped with specialized software known as Persefoni that could also gum up the works. The for-profit outfit founded in 2020 has managed to recruit several high-ranking SEC officials who all had a hand in crafting the climate rules first introduced in March 2022.

These include Allison Herren Lee, a former acting chair of the SEC, Kristina Wyatt, who served as the SEC’s senior counsel for climate and environmental, social, and corporate government (ESG), and Emily Pierce who served as the SEC’s assistant director in the Office of International Affairs.

The SEC estimates that it will cost anywhere from $460,000 to $640,000 for companies to comply with the new rules during the first year they are in operation. Given the complexity involved in tracking Scope 3 emissions, it’s not too difficult to imagine how Persefoni stands to benefit financially from software and accounting services specifically tailored for this purpose.

In fact, that appears to have been the plan right from the get-go. Influence Watch describes how the accounting firm and environmental activists joined forces to have substantial input on the disclosure rules. Moreover, Persefoni is prominently mentioned throughout the SEC proposal. But it’s not just carbon accountants who stand to benefit at the expense of companies that fall within the purview of the SEC.

Dan Kish, a senior fellow at the Institute for Energy Research, a Washington-based nonprofit, sees a potential “big payday for law firms” attached to the SEC’s supply chain reporting mandates.

“This is all about expanding the size and scope of government,” he said in an interview. “Lawyers can get involved with a class action lawsuit and they’ll say this particular company didn’t properly report their emissions. You can expect the lawyers to take a huge chunk from these suits. This gets into very gray areas about how a company can be expected to account for every single item along the supply chain.”

Kish continued:

“You’ll have lawyers intervening supposedly to protect the public interest, but they’ll be raking in all kinds of cash. The process doesn’t stop here since the law firms will then dump campaign contributions into the coffers of the people pushing these policies.”

The SEC’s actions can be viewed as just one small part of President Biden’s “whole-of-government effort” to push climate initiatives at the expense of taxpayers and energy producers.

Companies in the energy-intensive states, such as Pennsylvania, will likely feel a greater financial burden, explained Gordon Tomb, a senior fellow with Commonwealth Foundation, a free market think tank headquartered in Harrisburg, explained. (RELATED: DAVID BLACKMON: Left-Wing Billionaires Have A New Plan Up Their Sleeves In War On Fossil Fuels)

“Pennsylvania is the second largest net supplier of energy to other states and the largest exporter of electricity to other states,” Tomb said. “As such, private companies supporting enterprises that emit carbon dioxide in the production of energy number at least in the hundreds and their employees in the many thousands. Imposing costs artificially constructed to advance a quasi-religious climate ideology and create ways for the politically connected to make money without producing a benefit is viciously economically destructive.”

Ultimately, it’s up to Congress to reign in overreaching executive agencies. Last June, House Oversight Committee Chair James Comer, (R-K.Y.) and Senate Banking Committee ranking member Tim Scott (R-S.C.) sent a joint letter to the SEC seeking information and documentation providing insight into the commission’s relationship with Persefoni and environmental activist groups. That’s an encouraging sign, but hardly sufficient for the potential victims of burdensome new regulations.

AUTHOR

KEVIN MOONEY

Kevin Mooney is the Senior Investigative Reporter at the Commonwealth Foundation, Pennsylvania’s free-market think tank, and writes for several national publications. Twitter: @KevinMooneyDC.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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Green Firm That Advised SEC On Proposed Emissions Rule Sold Carbon Credits From Chinese Region Known For Slave Labor

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The Biden administration’s plan to impose climate disclosure requirements on the financial sector draws on the input of a green consultancy that sold carbon credits derived from China’s Xinjiang province, according to a Daily Caller News Foundation review of public documents.

The Securities and Exchange Commission (SEC) is set to release its final climate disclosure rule in the coming months, and the agency’s proposed rulemaking documents cite the Swiss-based climate consultancy South Pole multiple times. Likewise, the SEC spoke with a high-ranking South Pole employee about the rule after the firm had sold carbon credits generated in a region of China known for forced labor.

South Pole touts itself as “[striving] for a world where businesses, governments and communities make climate action the new normal.” In a November piece, the investigative group Follow the Money reported that South Pole sold carbon offset credits derived from projects in Xinjiang, China, the epicenter of the Chinese Communist Party’s repressive campaign against Uyghur Muslims.

“Given the specious, often clearly fraudulent nature of the carbon credits rubric in general, can anyone be surprised about South Pole’s apparent scam? If our media establishment were doing its job, the carbon credits grift would rank as one of the major scandals of our time,” David Blackmon, a 40-year veteran of the American oil and gas industry who now regularly consults and writes about the energy sector, told the Daily Caller News Foundation. “The fact that the Biden SEC would rely on these apparent grifters so strongly as support for a major, economically destructive regulatory action is unsurprising, and just in keeping with the overall gaslighting character of the Biden regime.”

South Pole is cited several times in the SEC’s disclosure proposal, and the company’s director of sustainable finance, Rebecca Self, joined a January 2022 call with SEC staff to discuss the potential costs of reporting climate-related risks and statistics, according to a publicly available SEC memorandum.

South Pole sold carbon offset credits derived from Xinjiang for several years, stopping in 2021, according to Follow the Money. South Pole would buy the credits from their Chinese partner for less than one euro each, and then resold them to clients like Spotify, British Petroleum and the European Youth Parliament for more than four euros apiece.

The carbon market allows companies to buy and sell carbon credits that nominally offset emissions generated in their operations. “Carbon credits are measurable, verifiable emission reductions from certified climate action projects,” according to South Pole’s own definition.

It is important to note that it is unclear whether any of the operations that formed the basis for South Pole’s credits had any exposure to forced Uyghur labor, according to Follow the Money. However, the ubiquity of forced labor in the region during the time that the company was selling the credits certainly raised those risks above typical risk levels seen elsewhere in the world.

Within the first few years after its founding in 2006, the firm identified Xinjiang’s cotton fields as a potential source for carbon credits, according to Follow the Money. The region’s cotton farmers, many of whom are Uyghurs, would typically burn the twigs and sticks created as a harvesting byproduct on the fields, leave them to rot or collect and dump them elsewhere.

Rather than wasting those twigs, South Pole realized that they had potential value as offsets if they could be converted into fuel at a Chinese biomass plant, according to Follow the Money. This realization reportedly became the basis for the firm’s Xinjiang-derived carbon credits. The company has drawn scrutiny for its operations in other parts of the world beyond China as well.

South Pole is alleged to have sold credits derived from its landmark Kariba Forest Protection project in Zimbabwe, despite knowing that the Kariba project may have only actually produced one-third of the offsets the company claimed to the public, according to a separate investigation conducted by Follow the Money.

If the SEC’s March 2022 proposal is finalized in its current form, the SEC would require publicly-traded corporations to disclose climate-related risks to their businesses in financial filings. Additionally, the SEC’s proposal would require companies to disclose the greenhouse gas emissions directly caused by their operations, those generated by the energy and electricity they use to power their operations and indirect emissions produced in companies’ upstream and downstream supply chains.

Scores of congressional Democrats have urged the SEC and the agency’s chairman, Gary Gensler, to swiftly adopt the disclosure standards. However, many corporate interests, including BlackRock CEO Larry Fink, have reportedly pushed back against the rule as proposed, and reports have surfaced suggesting that the agency may water down the proposal when it moves to finalize the rules sometime in early 2024 after several delays.

The SEC, South Pole and the White House did not respond immediately to the DCNF’s requests for comment.

AUTHOR

NICK POPE

Contributor.

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All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Elon Musk Terminates Twitter Deal

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Tesla CEO Elon Musk canceled his bid to purchase Twitter Friday, according to a letter from his lawyers published in a Securities and Exchange Commission filing.

Twitter “appears to have made false and misleading representations” and “has not complied with its contractual obligations,” according to the letter. Mike Ringler, attorney for Skadden Arps, accused the company of refusing to provide information requested by Musk, including what percent of its monetizable users were fake or spam accounts.

Musk threatened to cancel his deal with Twitter June 6 after the company reportedly refused to hand over user data reports he had requested. The company has claimed that only 5% of its accounts are fake or spam, but Musk speculated that number could be four times higher.

“We are committed to closing the transaction on the price and terms agreed upon with Mr. Musk and plan to pursue legal action to enforce the merger agreement. We are confident we will prevail in the Delaware Court of Chancery,” the Twitter board said in a statement provided to the Daily Caller News Foundation.

“Twitter has not provided information that Mr. Musk has requested for nearly two months notwithstanding his repeated, detailed clarifications intended to simplify Twitter’s identification, collection, and disclosure of the most relevant information sought in Mr. Musk’s original requests,” the letter from Musk’s attorney read.

Musk agreed to buy Twitter for about $44 billion April 25 after the company attempted to thwart his buyout efforts.

This story is breaking and will be updated as the situation develops. Please check back for updates.

AUTHOR

LAUREL DUGGAN

Social and culture reporter.

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Twitter Unanimously Approves Elon Musk’s $44 Billion Purchase Bid

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Twitter’s board unanimously recommended Tuesday that shareholders approve billionaire Elon Musk’s offer to buy the social media site for $44 billion.

Musk told Twitter employees earlier in June that he still planned to move forward with the purchase, despite shares in the company remaining significantly lower than his offer price, The Associated Press reported. He noted on Tuesday that approval of the purchase by shareholders was one of a number of unresolved matters halting his purchase, the outlet continued.

The Tesla billionaire’s offer would net a profit of $15.22 per share for investors if it closed now, the AP noted. Musk offered to pay $54.20 per share, despite them falling short of this number upon opening bell Tuesday, the outlet reported.

Twitter’s board of directors said in a filing with the US Securities and Exchange Commission that it “unanimously recommends that you vote (for) the adoption of the merger agreement.”

Musk has previously said that Twitter “will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.” He then offered to buy the entirety of the company in order to “unlock” the “extraordinary potential” of the social media platform. Twitter founder and former CEO Jack Dorsey has praised Musk’s decision to purchase the platform and has also said that he will “never be CEO again.”

AUTHOR

KAY SMYTHE

Reporter.

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