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LARRY: WELL BIDEN’S REGULATORY
OCTOPUS REACHING INTO THE SEC IS
OF COURSE WAGING WAR ON FOSSIL
FUELS BUT COMMISSIONER HESTER
PEIRCE SAYS KNOW, WE’RE NOT THE
SECURITIES AND ENVIRONMENT
COMMISSION.
WELL, AND SHE JOINS ME NOW TO
TALK ABOUT IT.
RIGHT ON, HESTER.
I DO READ YOUR ENTIRE THING.
I WILL SAT SOME POINT.
I DIDN’T READ IT.
I READ JOHN COCHRAN’S SUMMARY OF
IT AND ANDREW HOLMAN WAS
CHEERING ME ON FOR DOING THIS.
THANK YOU FOR COMING ON.
SO WE’RE NOT THE SECURITIES AND
ENVIRONMENT COMMISSION.
I ALWAYS THOUGHT THAT WHAT WAS
MATERIAL, PUBLIC INFORMATION
COVERED ALL OF THE RISKS
INVOLVED AND I WAS TERRIBLY
INTERESTED IN YOUR DISSENT ABOUT
THE IDEA THAT THIS NEW RULE
WOULD KIND OF, KIND OF TELL THE
COMPANY HOW IT SHOULD BE RUN, OR
AT LEAST RUN BY OUTSIDERS, NOT
BY THE MANAGERS THEMSELVES.
>> YEAH, THAT’S RIGHT, LARRY,
AND THANKS FOR HAVING ME.
THAT IS EXACTLY WHAT I SEE THE
PROPOSAL AS TRYING TO DO, TELL
COMPANIES THAT THEY HAVE TO BE
THINKING ABOUT CLIMATE ALMOST AS
MUCH AS THEY’RE THINKING ABOUT
THEIR FINANCIAL PERFORMANCE,
WHICH, IS CERTAINLY NOT WHAT,
WHAT INVESTORS WOULD WANT.
YOU WOULD THINK THAT INVESTORS
WANT COMPANIES TO MAKE MONEY AND
MAKE PRODUCTS AND SELL THINGS
BUT WE’RE PUTTING CLIMATE RISKS
ON PAR WITH OTHER KINDS OF
RISKS.
NOW OF COURSE CLIMATE RISKS TO
THE EXTENT THAT THEY’RE MATERIAL
TO A COMPANY, THAT IS SOMETHING
THAT A COMPANY ALREADY HAS TO
DISCLOSE, SO WE DON’T NEED A NEW
RULE TO TELL THEM TO DO THAT.
LARRY: YEAH, I MEAN YOU’RE
DESCRIBING THIS UPSTREAM AND
DOWNSTREAM RISK.
I MEAN PURCHASING, SUPPLY
CHAINS, DISTRIBUTION, ALMOST
CONSUMER BEHAVIOR, CONTRACTORS.
I MEAN HOW CAN A COMPANY
POSSIBLY KNOW WHAT THE CARBON
EMISSIONS IMPACT IS GOING TO BE
FROM ALL OF THIS FAR-FLUNG
ANALYSIS THAT I MIGHT ADD HAS NO
PARTICULAR EMPIRICAL BACKGROUND?
>> WELL I THINK THAT IS EXACTLY
THE PROBLEM.
WHAT WE’RE GOING TO END UP
SEEING IS THE CREATION OF A
WHOLE NEW INDUSTRY DESIGNED TO
COLLECT THE DATA FROM UPSTREAM
SUPPLIERS, DOWNSTREAM CUSTOMERS
AND THEN THAT DATA IS GOING TO
GO INTO THE FILINGS THAT WE
OVERSEE AND THE BAD PART ABOUT
THAT, IT IS GOING TO END UP
MAKING THOSE FILINGS LESS
RELIABLE.
PEOPLE WILL NOT BE ABLE TO TRUST
THE DATA BECAUSE IT IS SO
SPECULATIVE.
AND I JUST HATE TO SEE OUR
FILINGS BEING FILLED WITH
INFORMATION THAT INVESTORS CAN’T
RELY ON.
THE WHOLE POINT OF OUR
DISCLOSURES IS THAT INVESTORS
CAN RELY ON THEM TO MAKE
INVESTMENT DECISIONS.
LARRY: I MEAN ONE OF THE THINGS,
THIS IS MY EDITORIAL, BUT OTHERS
AGREE WITH THIS, YOU KNOW THESE
CLIMATE CHANGES, YOU’RE TALKING
ABOUT MEANINGFUL CLIMATE
CHANGES, HESTER, 50 YEARS, 100
YEARS.
THEY’RE NOT IMMEDIATE.
THEY’RE NOT LIKE NEXT MONTH,
NEXT QUARTER CHANGES.
ONLY EXTREMISTS BELIEVE IN THAT
STUFF AND I THINK IT IS GOING TO
MISLEAD INVESTORS BUT IT’S ALSO,
ISN’T IT GOING TO IMPOSE HUGE
BURDENSOME RED TAPE AND
PAPERWORK COSTS AND COMPANIES
WILL HAVE TO HIRE ALL THESE
PEOPLE TO TRY TO GET THE
INFORMATION THAT THIS SEC RULE
WOULD PROVIDE?
I MEAN I DON’T KNOW HOW THEY
WILL STAY IN BUSINESS?
>> YEAH.
ABSOLUTELY.
IT IS GOING TO BE VERY EXPENSIVE
FOR COMPANIES.
SOME COMPANIES ARE PRODUCING THE
DATA NOW BUT THEY’RE NOT DOING
IT AND PUTTING IT IN SEC FILINGS
WHERE THERE IS A WHOLE DELIVER
THE LIABILITY, SET OF LIABILITY
RISKS AND, SO IT IS A MASSIVE
NEW EXPENSE FOR COMPANIES AND,
SOME OF THESE RISKS, AS YOU SAY
ARE VERY DIFFICULT TO PREDICT
VERY FAR OUT IN THE FUTURE.
TO TRY TO PREDICT WITH THE
PRECISION NECESSARY FOR A
COMPANY TO FIGURE OUT HOW IT
WILL BE AFFECTED.
SO WE’RE SPENDING A LOT OF MONEY
FOR NOT A LOT OF VALUE FOR
INVESTORS.
I JUST DON’T UNDERSTAND WHY WE,
THE SEC, WOULD WANT TO GET
INVOLVED IN THIS, IN THIS
BUSINESS OF TRYING TO FIGURE OUT
HOW CLIMATE MODELS WILL, WILL
INTERACT WITH PARTICULAR
COMPANIES.
IT WILL PUT US IN A VERY BAD
POSITION AND PUTS INVESTORS IN A
BAD POSITION AND THE ECONOMY
BECAUSE IT IS GOING TO END
UPSHIFTING RESOURCES TO CERTAIN
INDUSTRIES THAT ARE FAVORED AND
AWAY FROM OTHER INDUSTRIES.
THE ONE THING I KNOW IS THAT
MARKETS ARE BETTER AT SOLVING
PROBLEMS THAN REGULATORS ARE.
WE CERTAINLY CAN’T PREDICT THE
FUTURE.
WE CERTAINLY CAN’T PLAN WHERE
THE SOLUTIONS FOR CLIMATE
PROBLEMS AND OTHER TYPES OF
PROBLEMS ARE GOING TO COME FROM.
LARRY: WELL, HESTER PEIRCE, I’M
GOING TO READ YOUR WHOLE
DISSENT.
I PROMISE YOU, I PROMISED ANDREW
OLMAN I WOULD TOO, HE WAS OUR
DEPUTY FOR THESE THINGS.
I THINK IT IS IMPORTANT FOR
PEOPLE TO HEAR THIS VERY
IMPORTANT DISSENT.
YOU ARE THE SEC.
IT IS NOT SECURITIES AND
ENVIRONMENT.
IT IS SECURITIES AND EXCHANGE.
GOOD LUCK.
WE’LL SEE WHAT HAPPENS.
>> THANKS FOR HAVING ME ON.
I APOLOGIZE IN ADVANCE FOR HOW
LONG IT IS.