Overnight Finance

On The Money — Feds propose new disclosure rule for public companies

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Happy Monday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here.

Today’s Big Deal: New rules just dropped for how companies traded on the stock market must explain their climate-related financial risks and contributions to climate change. We’ll also look at Fed Chair Jerome Powell’s latest comments on interest rates and a rush of cannabis-banking lobbying.  

For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom.  Reach us at slane@thehill.comafolley@thehill.com and kevers@thehill.com

Let’s get to it. 

 

SEC announces rules on emissions, climate risk 

The Securities and Exchange Commission (SEC) proposed rules Monday that would force publicly traded companies to reveal the ways climate change could threaten their businesses and their own contributions to global warming.  

The SEC voted 3-1 to propose long-awaited standards for how businesses traded on the stock market must reveal to investors the ways climate change affects their financial stability, along with their own roles in the production of greenhouse gasses.  

SEC Chairman Gary Gensler, a Democrat, along with Democratic Commissioners Allison Lee and Caroline Crenshaw, voted in favor of the rule, while SEC Commissioner Hester Peirce, the agency’s sole Republican, voted against it.  

Breaking it down:  

  • Under the proposed rules, publicly traded companies will be required to explain in their regular disclosures to investors how certain climate-related risks can affect their finances.
  • Companies will also be required to disclose their “Scope 1” emissions — the amount of greenhouse gas emissions they directly produce through their own business operations, such as manufacturing or mining — along with their “Scope 2” emissions, which come from the energy they purchase to keep their business running.
  • Companies would also be required to report their “Scope 3” greenhouse gas emissions, which include emissions from the goods and services purchased by the firm, if they have set public emissions reduction targets or if those emissions pose a direct financial risk to the business.  

Sylvan has more here. 

 

RATE RATE…DON’T TELL ME

Powell opens door to faster hikes, higher rates  

Federal Reserve Chair Jerome Powell on Monday said that the central bank will not hesitate to raise interest rates at a faster than typical pace to curb inflation.

In a Monday speech to the National Association of Business Economists (NABE), Powell opened the door to raising interest rates in 0.5 percentage point increments and setting them at a level meant to restrict the economy.

Powell touted the strength of the U.S. job market and overall recovery from the coronavirus pandemic, expressing confidence that the Fed won’t cost the economy job gains.

Even so, Powell made clear the Fed would no longer wait for supply chains to normalize or other shocks to fade to hike interest rates and pull back on stimulus.

Price stability is essential if we are going to have another sustained period of strong labor market conditions,” Powell said.

“We will take the necessary steps to ensure a return to price stability. In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.” 

Sylvan breaks it down here.

 

JOINT EFFORT

Cannabis industry goes all-in on banking push before midterms 

The cannabis industry is pushing lawmakers to get a marijuana reform bill to President Biden’s desk before the November midterms, fearing that a Republican takeover of Congress could doom its chances.

In an in-person lobbying blitz last week, more than 20 chief executives of top cannabis companies urged lawmakers in both parties to pass the SAFE Banking Act, a bill to allow them to work with U.S. banks that the industry is confident will win enough GOP support to pass the Senate. 

“We’re trying to be practical about how we get something passed this year,” Curaleaf CEO Joe Bayern said in an interview. “We think the industry needs something to happen this year.” 

The industry needs to convince Senate Majority Leader Chuck Schumer (D-N.Y.), who has blocked the bill from being included in larger packages over fears that its passage would limit future comprehensive reforms.

Cannabis executives suggested that the banking bill could be coupled with criminal justice and social equity reforms, but reiterated that SAFE Banking needs to get done regardless.   

“We want comprehensive reform, but we also recognize that with the potential for the House and Senate to change hands, we have an opportunity now to pass impactful legislation, and if we fail to do that, it could be years until we get something done,” said Jared Maloof, CEO of Ohio-based medical marijuana company Standard Wellness. 

Karl details the lobbying effort here.

 

CHANGE YOUR CLOCKS

Push to make daylight saving time permanent has longtime backers 

The Senate’s swift passage of a proposal to make daylight saving time permanent caught members and the public off-guard this week and led to plenty of cheering on social media about ending the “spring ahead” and “fall back” changes to the clock.

It also dovetailed with a decades-long effort by some business groups who want to maximize the hours per day that American consumers spend buying things. 

The effort to push permanent daylight saving time has been particularly advocated by golf groups, who see it as a way to keep people on the greens for more of the year. 

The bill has broad support from members of the National Golf Course Owners Association and the World Golf Foundation, among other groups.

However, the bill has drawn opposition from the American Academy of Sleep Medicine and other medical groups that say permanent daylight saving time may overlook potential health risks that would be avoided under permanent standard time instead. 

The Hill’s Tobias Burns explores the debate here

 

Good to Know

Karl teamed up with The Hill’s video team to explain the movement to ban members of Congress from trading stocks while in office.   

Voters broadly support a stock trading ban, an issue that could garner attention ahead of the 2022 midterms. Some Democrats are hoping to pass a bill before November, while Republican leaders have suggested that they could tackle the issue if they win control of Congress. 

Here’s what else we have our eye on: 

  • New fees for cryptocurrency transactions through Venmo and its parent company PayPal went into effect Monday.
  • The incoming Teamsters president says he is ready to take on the challenge of unionizing Amazon despite tough odds. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

Tags Chuck Schumer Gary Gensler Jerome Powell Joe Biden

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