The Securities and Exchange Commission recently introduced a proposal to rescind its 2024 rule requiring companies to report extensive data on climate change, a much-needed move that will benefit Americans. Everyday citizens can and should use the SEC’s rulemaking portal to comment in support of this proposal.

But first, it is worth revisiting the 2024 rule to understand why this proposal urgently needs to become a final rule.

The SEC regularly mandates that companies disclose certain impacts on their businesses so long as they are material—that is to say, matters that reasonable investors would find relevant to their investing strategy. These disclosures tend to be important but quite mundane, like mandating reporting on a company’s financial conditions, financial statements, and major events like mergers and acquisitions. The foundation for these disclosures came during the Great Depression, and the purpose of the measures was to prevent companies from misleading investors.

But the Biden-era rule departed from this standard. It mandated companies disclose all sorts of speculative climate impacts, effectively turning large parts of corporations into environmental data collection and modeling organizations instead of profitable companies. At times, it appeared as though the SEC expected firms to care more about predicting the weather than about disclosing material impacts to their business operations.

Even worse, the commission waded deep into corporate governance waters by pressuring companies to follow a strict set of procedures to comply with the new disclosure rules. Thankfully, the SEC stayed enforcement pending the litigation that resulted, but without a rescission, its provisions will go into effect if a court decides to uphold the rule.

If that were to happen, corporations would become bogged down in paperwork detailing subjects over which they exercise little control and have even less experience—and which have little to do with their actual business. They could even be subject to litigation if they got their projections wrong, an almost certain reality given how climate models have consistently overestimated actual warming, and given that the SEC itself has frequently failed in its attempts to predict legal outcomes related to climate change.

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Perhaps more important is the impact on small and independent investors. Disclosures are often cited as a means to level the playing field between small and institutional investors. However, excessive disclosures can actually harm small investors, a problem known as information overload.

Institutional investors are far better equipped to handle heavy compliance burdens, and evidence shows that excessive disclosure requirements create asymmetry between Wall Street and Main Street. As such, one critical effect of the climate disclosures from the 2024 rule is to confuse and mislead small and independent investors—accomplishing the opposite of the SEC’s post-Great Depression statutory mandate.

The core purpose of investing is to make money, not to pressure companies to address climate goals that Congress itself has not enacted. Individual investors may incorporate environmental, social, and governance goals into their own investment strategies if they want, but it is inappropriate—and potentially illegal—for the SEC to pressure companies to cater to ESG investors at the expense of those who simply want to nurture their nest eggs.

Time and again, these ESG schemes fail investors who want to maximize their returns. ESG funds are more volatile and riskier than non-ESG funds, and companies that go all-in on ESG tend to perform worse than those that don’t.

Worse still, ESG offers a deeply subjective framework for measuring a company’s value. For example, MSCI, a leader in ESG ratings, gave SpaceX the same score as Russia after the latter’s invasion of Ukraine. When a rating system produces results this detached from common-sense assessments of performance and innovation, it raises serious questions about whether it measures corporate value at all.

ESG also undermines corporate accountability to investors—the cardinal principle that the SEC is meant to defend—by allowing companies to point to rival metrics to help counteract or explain away any failures to meet their profitability goals. The SEC should steer clear of mandating ESG and related schemes instead of blundering in as it did with the 2024 climate disclosure rule.

The rescission proposal is a win for American investors and companies. Whether you invest your money directly or have it invested through a pension fund or 401K, repealing the burdensome and destructive 2024 climate disclosure rule will make it easier to understand your investments and boost returns. Moreover, companies will face lower compliance costs, allowing them to shift capital towards workers, innovation, and investor returns.

The proposal is promising, but it hasn’t taken effect yet. In order for the proposal to become a final rule, the SEC must review and incorporate the comments of citizens. One can already imagine the outcry from progressives against this proposal.

To avoid the negative effects of the climate disclosure rule and foster long-term wealth creation, stronger savings, and greater financial security for Americans, we urge citizens to submit a comment to the SEC through its rulemaking portal in support of the proposal. Comments are due by 11:59 p.m. on Aug. 3.