‘It seems to be entirely a giveaway to politically connected insiders,’ Will Hild, Consumers’ Research executive director, claims.
What President Joe Biden calls the “historic transition” to green energy also comes with a generous helping of cronyism, enriching those with government connections, a new report alleges.
Consumers’ Research, a watchdog group, said in its
report released last week that the Securities and Exchange Commission relied heavily on a company called Persefoni, a startup that aspires to be the “TurboTax of greenhouse gas reporting,” when drafting its new “green accounting” rule.
Subsequently, SEC employees who were instrumental in drafting the rules left the agency to take jobs at Persefoni, Consumers’ Research states.
“This shows that the rule itself was created through a fairly corrupt process that doesn’t serve consumers or shareholders,” Will Hild, executive director of Consumers’ Research, told The Epoch Times.
“It seems to be entirely a giveaway to politically connected insiders.”
The SEC’s
proposed rule on climate disclosure, which is expected to be enacted in coming weeks, would require that all listed companies provide audited reports on their CO2 emissions, as well as the emissions of their suppliers and customers.
That would require, for example, that food companies such as Nestle, Tyson Foods, and PepsiCo produce audited statements of the farmers that supply them, requiring farmers to also do CO2 audits.
In addition, companies are required to report on their strategies to reduce CO2 emissions.
The SEC was originally created to protect individual investors from securities fraud and has traditionally done so by requiring publicly traded companies to disclose audited financial data and material risks to investors. However, critics say it has become politicized under the Biden administration’s “
whole of government“ agenda to fight climate change.
In announcing the new rule, SEC Chair Gary Gensler stated that “investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions.”
The SEC has justified the new climate rule by claiming that investors want it. But it’s unclear whether Mr. Gensler was referring to smaller investors, which the SEC was created to protect, or institutional asset managers such as BlackRock, Vanguard, State Street CalPRS, and New York pension funds.
These institutional asset managers, many of whom have advocated for “sustainable” investing and the reduction of fossil fuels among other social justice goals, collectively control tens of trillions of dollars from people who invest in index funds, mutual funds, and pension funds.
The SEC’s climate rule will likely prove lucrative for accounting firms that will provide the required emissions audits.
One of the issues with “green accounting” is how much it would cost companies, particularly smaller companies that aren’t listed but would still have to comply because they are suppliers or customers of large corporations.
According to Consumers’ Research, the SEC relied on Persefoni, a startup company, to generate lower cost estimates in order to make the rule appear less expensive to businesses that may struggle to pay for it.
“The cost estimate that Persefoni put together was on the far lower end of what was submitted, for somebody that has no track record of complying with any of this,” Mr. Hild said.
“They [Persefoni] have only existed for three years, and yet, that’s the closest cost estimate that the SEC used.
“They ignored the methodology of groups like the Chamber of Commerce and others, who either themselves or their members have a long track record of having to comply with SEC regulations,” he said.
The SEC has estimated the cost of compliance at $640,000 in the first year and $530,000 each subsequent year, for large companies, and $480,000 in the first year and $420,000 thereafter for smaller companies.
“Among the six entities cited in the SEC’s time and cost formula—Society of Corporate Governance, the Climate Risk Disclosure Lab at Duke University, S&P Global, United Kingdom’s Department for Business, Energy and Industrial Strategy, Persefoni, and South Pole—only the Society of Corporate Governance represents companies that would be regulated by the proposal and bear the costs,” according to the Consumers’ Research report.
“Three of the six sources [S&P Global, South Pole, and Persefoni] actually provide services to companies tasked with complying with the rule.”
Persefoni’s CEO Kentaro Kawamori responded to the report in a company
blog, stating that “as experts in the narrow and rather niche field of carbon accounting software, the SEC first spoke with Persefoni and other industry experts in 2021 while conducting stakeholder engagement for its climate disclosure proposal—particularly on the economic impact of any rule.”
“Persefoni provided input on how software reduces hours of manual processing and provides more accurate carbon emissions data, reducing accounting costs for businesses,” he wrote.
He criticized Consumers’ Research as “part of a radical anti-ESG movement.”
Consumers’ Research also asserts that two SEC employees who were central in writing the climate disclosure rule have since become employees of Persefoni. Its claims are based on correspondence records that it unearthed via the Freedom of Information Act.
SEC officials didn’t respond by press time to a request by The Epoch Times for comment.
Allegations of cronyism and insider dealing go beyond the SEC.
There are also
reports that John Podesta, President Biden’s clean energy czar, and gatekeeper for the $350 billion to be paid out under the Inflation Reduction Act to green energy projects, held a private unreported meeting in June with Rivian Automotive CEO Robert Scaringe, senior policy director Chris Nevers, senior public policy manager Corey Ershow, and Rivian’s lobbyist Izzy Klein at the White House.
Rivian, a California-based producer of electric vehicles (EV), has lost billions of dollars since going public in 2021, including a $4.7 billion loss in 2021 and a $6.8 billion loss in 2022.
The company reportedly lost more than $30,000 per EV it produced last year and has turned to the government and taxpayers for financial support.
