Blair Miller

(Daily Montanan) Montanans are likely to start seeing more political advertising surrounding climate change and investments following the Securities Exchange Commission’s adoption last week of rules to require publicly traded companies to disclose their greenhouse gas emissions and climate risks to investors.

Washington, D.C-based advocacy group Unlocking America’s Future announced the ad campaign in Montana on Friday as part of a six-figure spend in Montana, Arizona, Pennsylvania and the District of Columbia urging support for the new rules, which Montana’s attorney general has already challenged in a petition for review filed this week alongside eight other states.

The environmental, social and corporate governance (ESG) investing disclosure rules have been a moving target for politicians and political groups across the spectrum since the SEC first voted to propose new regulations in March 2022 to require public companies to disclose their greenhouse gas emissions and information about what risks climate change could add for investors wanting to put their money into the company.

“The rules will provide investors with consistent, comparable, and decision-useful information, and issuers with clear reporting requirements,” SEC Chairperson Gary Gensler said last week. “… They will also require that climate risk disclosures be included in a company’s SEC filings, such as annual reports and registration statements rather than on company websites, which will help make them more reliable.”

Reuters reported the three Democratic commissioners approved the final rule, while the two Republicans voted against it. One GOP commissioner said the commission was trying to use the rules to drive social change.

Republicans in Montana, including Gov. Greg Gianforte, Attorney General Austin Knudsen, and the state’s three federal representatives, have widely panned the ESG movement as an attack on energy companies and gun manufacturers, among other groups.

In January 2023, Gianforte and the Montana Board of Investments said it would not make ESG investments with $26 billion in state funds, as Gianforte called the movement a “trend of activist, woke capitalism.” He also signed a bill in April prohibiting Montana from considering any “nonpecuniary, environmental, social, governance” factors for public investments.

Knudsen in October 2022 asked the SEC to reopen its comment period for the proposed rules, saying they “impose burdensome requirements on regulated companies and will ultimately harm investors and all Americans.” He’s also joined other states in investigating ESG practices at banks and more recently the investment firm BlackRock.

Some Democrats, especially those on the left, have called for even more stringent ESG policies in the face of climate change caused by the burning of fossil fuels and greenhouse gas production.

The version of rules the SEC voted to adopt on March 6 were a watered-down version of the ones originally proposed, stripping out a requirement that companies track emissions from their suppliers and end-users of products, called Scope 3 emissions, which Montana’s Democratic U.S. Sen. Jon Tester had called for since 2022, partially at the urging of the Montana Farm Bureau Federation.

“The last thing family farmers need is for big corporations or the federal government to force them to fill out piles of unnecessary paperwork,” said Tester, also a farmer, in a statement. “I’m proud to have declared this requirement dead on arrival and to have fought every step of the way to stop it in its tracks so that our farmers can continue to focus on what’s important: feeding the world.”

Montana Farm Bureau Federation President Cyndi Johnson said Tester had been persistent in fighting the Scope 3 emissions portion of the proposal with his multiple letters and questions pushing Gensler to not include producers under the reporting requirements.

But after the rules were finalized last week, some on both sides of the issue remain unhappy. Three different groups of Republican-led states have sued the SEC in the days since, arguing they are too burdensome for businesses and part of a “radical green scheme,” as Iowa’s attorney general said in announcing the lawsuit that Montana joined. That challenge, as well as the others, say the SEC exceeded its authority in passing the rules and are asking the final vote to be vacated.

On the other side of the coin, the environmental advocacy organization Sierra Club sued to block the rules because they did not go far enough and did not account for the Scope 3 emissions.

“The Commission’s arbitrary decision to remove robust emissions disclosure requirements and other key elements from the proposed rule falls short of what the law requires,” Sierra Club Executive Director Ben Jealous said in a statement.

Similar ESG rules are in place in Europe and California, but California’s are being challenged by groups including the U.S. Chamber of Commerce and have come under fire from most Republicans in Congress.

The ad campaign tells Montanans that billionaires and politicians are trying to hide financial risks caused by climate change from them, and tells them to urge Congress not to try to block the rules from taking effect.

The group has been pushing for the rules to be adopted, releasing polling in February saying that once respondents were told what the rules meant, 66% said they were in support.

“Americans should demand that Congress side with Montanans and their families, not wealthy CEOs who prioritize profits over people,” said Unlocking America’s Future spokesperson Kyle Herrig.