H.R.257 - Stop Environmental Calculations Act of 2025; SEC Act of 2025 (119th Congress)
Summary
H.R. 257, also known as the Stop Environmental Calculations Act of 2025 or the SEC Act of 2025, seeks to amend the Securities Exchange Act of 1934. The bill aims to prevent the Securities and Exchange Commission (SEC) from mandating climate-related disclosures by issuers if those disclosures are deemed immaterial to investors. The bill was introduced in the House of Representatives by Mrs. Bice and referred to the Committee on Financial Services.
Expected Effects
If enacted, H.R. 257 would limit the SEC's authority to require companies to disclose climate-related information. This could lead to reduced transparency regarding the environmental impact of businesses. It may also affect investment decisions, as some investors consider climate-related risks and opportunities to be material.
Potential Benefits
- Potentially reduces compliance costs for businesses by limiting required disclosures.
- May prevent the SEC from overstepping its regulatory authority, focusing it on financially material information.
- Could lead to more focused and relevant disclosures for investors, avoiding information overload.
- Supports the idea that companies should not be forced to disclose information not directly relevant to financial performance.
- May encourage innovation by preventing prescriptive mandates.
Most Benefited Areas:
Potential Disadvantages
- Could reduce transparency regarding climate-related risks, potentially harming investors who consider such factors material.
- May hinder efforts to address climate change by limiting the availability of environmental information.
- Potentially disadvantages investors who want to align their investments with environmental goals.
- Could lead to a lack of standardization in climate-related disclosures, making comparisons between companies difficult.
- May create uncertainty about what constitutes 'material' climate-related information.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's alignment with the Constitution centers on the balance between regulatory power and individual liberties, particularly concerning the First Amendment (freedom of speech) and the Commerce Clause (Article I, Section 8). The argument for alignment rests on the idea that the government should not compel speech (disclosure) that is not directly related to a legitimate regulatory purpose (material financial information).
However, opponents might argue that limiting disclosure requirements hinders the government's ability to regulate activities that impact interstate commerce, including those related to climate change. The courts would likely weigh the competing interests to determine the bill's constitutionality.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).