Full opinion text
McGOWAN, Circuit Judge: This appeal, from a District Court order directing the Securities and Exchange Commission (SEC or Commission) to conduct further proceedings incident to a petition for rulemaking, raises issues intersecting three important federal statutory schemes: the Securities Acts, the Administrative Procedure Act (APA), and the National Environmental Policy Act (NEPA). It involves in particular a request made of the Commission, and denied by it after seven years of proceedings, to promulgate rules requiring comprehensive disclosures by corporations of their environmental and equal employment policies. The District Court held that the Commission had acted arbitrarily and capriciously in denying the petition. Because we find the Commission’s action sustainable under the scope of judicial review applicable to this case, we reverse. I Appellees are organizations dedicated to inducing more responsive attitudes among American corporations towards the problems of environmental degradation and inequality of employment opportunity. To this end they participate in so-called “corporate responsibility campaigns,” which typically involve proposals to corporate management and shareholders, demands for disclosure, media campaigns, lobbying, educational efforts and litigation. Appellees believe that such campaigns have achieved positive results in some cases, but that their usefulness is currently limited by a shortage of information available to stockholders and an imbalance in the information that is distributed. Stockholders receive considerable lobbying by management through annual reports, selective disclosure, image advertising, and other mechanisms involving large corporate expenditures. In contrast, groups such as appellees find it expensive to compile and disseminate information even when managements are cooperative, and often difficult or impossible when managements are not. Institutional investors in particular, so it is claimed, are naturally reluctant to vote against management in the absence of full and balanced information, whatever their position would be if they were fully informed. Appellees believe that this impediment to corporate responsibility campaigns could be considerably reduced if corporations were forced to disclose comprehensive information about their environmental and equal employment policies. They expect, further, that such disclosure would aid the public in making sound investments and would deter corporations from taking actions likely to result in significant public disapproval. With these goals in mind, appellees naturally turned to the SEC, which is, of course, the agency charged with administering the federal statutes mandating disclosure of corporate information. On June 7, 1971, appellees petitioned the SEC to promulgate rules requiring corporate disclosure of environmental and equal employment information. These proposed rules were comprehensive in scope. In the words of the District Court, The petition . . . proposed that companies which file with the SEC be required to describe with respect to each major activity or product, inter alia: (1) the nature and extent (quantified to the extent feasible) of the resulting pollution or injury to natural areas and resources, and (2) the feasibility of, and plans for, correcting the same. The Petition also requested that the SEC require disclosure of whether the registered company has changed company products, projects, production methods, policies, investments or advertising to advance environmental values. In the equal employment opportunity area, that Petition requested that each company which makes public claims about its employment of minorities or women be required to include in its SEC filings statistical data by which the facts on this subject of major significance could be tested by interested persons. This employment information would be no more than that information required to be filed by such companies with the Equal Employment Opportunity Commission under existing laws and regulations. The Petition further requested that the SEC modify the definition of “material litigation”, for which disclosure is required in SEC forms, so as to include all proceedings against a company under Title VII of the Civil Rights Acts of 1964, 42 U.S.C. § 2000e et seq., or under the equal employment regulations covering federal contractors. In that event, the company would be further required to disclose the statistical data detailed above. NRDC I, supra, 389 F.Supp. at 694. As authority for this petition, appellees relied, inter alia, on NEPA, 42 U.S.C. § 4321 et seq., which was alleged to support strongly, if not to mandate, SEC environmental disclosure rules, see Sonde & Pitt, Utilizing the Federal Securities Laws to “Clean the Air! Clean the Sky! Wash the Wind! ”, 16 Howard L.J. 831 (1971), and on the call by the U.S. Commission on Civil Rights for SEC civil rights disclosure requirements “as a means of stimulating greater concern in civil rights and related areas.” Ex. C at 786. The SEC declined to propose the rules they advocated, while proposing other rules requiring more limited forms of corporate disclosure. Securities Act Release No. 5235 (Feb. 16, 1972), 37 Fed.Reg. 4365 (1972). After a preliminary jurisdictional misstep, appellees commenced this suit in District Court on March 2, 1973, as a challenge to the Commission’s failure to propose the rules they sought. After receiving and analyzing written comments on the Commissions rulemaking proposals in Release No. 5235, the SEC adopted part of the proposed rules in Securities Act Release No. 5386 (April 20,1973), 38 Fed.Reg. 12100 (1973). The adopted rules required disclosure only of the material financial effects of corporate compliance with environmental laws. Appellees thereupon supplemented their suit in District Court with challenges to the proceedings leading to Release No. 5386, and moved for summary judgment. The District Court agreed with appellees’ position and held that the SEC’s proceedings had been inadequate under the APA and NEPA. NRDC I, supra. It remanded with instructions that fuller proceedings be conducted and issued instructions as to the resolution of two key factual issues, 389 F.Supp. at 701-02 (footnote omitted): When the SEC reconsiders its rules in accordance with this opinion, it should develop a record and resolve two overriding factual issues. The first is the extent of “ethical investor” interest in the type of information which Plaintiffs have requested. The second issue is what avenues of action are available which ethical investors may pursue and which will tend to eliminate corporate practices that are inimical to the environment and equal employment opportunity. On remand, the SEC issued Securities Act Release No. 5569 (Feb. 11, 1975, 40 Fed.Reg. 7013 (1975), giving notice of renewed proceedings to fulfill the District Court’s instructions. The interest of the public in these proceedings was considerable. In nineteen days of public hearings, fifty-four oral presentations were made and three hundred fifty-three written comments received, creating a record over ten thousand pages long. 40 Fed.Reg. 51657-58 (1975). In large measure, the views expressed were polarized as either in favor of, or in opposition to, appellees’ proposal. The comments favoring the proposals generally declared that greater disclosure of information by corporations was essential both to sound voting on corporate policies and to informed consideration of corporate financial positions, in light of what the disclosed information would show with respect to environment and equal employment costs, and, generally speaking, the quality of the corporate management. On the other hand, hundreds of corporations submitted comments opposing the disclosure proposals on the ground that the cost of gathering the required information would be inordinately high, that shareholders were not seriously interested in the information, and that the benefits would be small. In October, 1975, and May, 1976, the SEC announced that it would not adopt the proposed disclosure rules, and issued lengthy explanatory statements. Securities Act Releases Nos. 5627 (Oct. 16, 1975), 40 Fed.Reg. 51656 (1975), and 5704 (May 6, 1976), 41 Fed.Reg. 21632 (1976). It argued, first, that its discretion to adopt particular disclosure requirements was very broad, depending in every case on balancing, in its expert judgment, the incremental value of the proposed disclosure against the potentially confusing effect on investors and the increased costs to registrants. Despite this broad discretion, however, the Commission contended that its authority was limited to contexts related to the objectives of the federal securities laws. And these laws, in the Commission’s view, were designed generally to require disclosure of financial information in the narrow sense only. The one partial exception to this principle, according to the Commission, was section 14(a) of the Securities Exchange Act, 15 U.S.C. § 78n(a), under which the “primacy of economic matters ... is somewhat less” because the purpose of that provision is to require fair opportunity for corporate suffrage. 40 Fed.Reg. at 51659. Turning to its obligations under NEPA, the Commission concluded that although the statute made environmental concerns part of its substantive mandate, it did not go so far as to authorize the SEC to promulgate disclosure rules unrelated to its responsibilities under its organic statutes. NEPA, therefore, authorizes and requires the Commission to consider the promotion of environmental protection “along with other considerations” in determining whether to require affirmative disclosures by registrants under the Securities Act and the Securities Exchange Act, and, although the NEPA does not require any specific disclosures, as such, we have been required to explain the alternatives which we considered in meeting our obligations under NEPA and the reasons why we have rejected substantial alternatives, in sufficient detail to permit judicial review. 40 Fed.Reg. at 51662 (footnote omitted). In determining how best to fulfill these NEPA duties, the Commission considered five alternatives proposed during the proceedings: (1) comprehensive disclosures of the environmental effects of corporate activities, (2) disclosure .of corporate noncompliance with applicable environmental standards, (3) disclosure of all pending environmental litigation, (4) disclosure of general corporate environmental policy, and (5) disclosure of all capital expenditures and expenses for environmental purposes. 40 Fed.Reg. at 51662. All of these the Commission ultimately rejected. From the summary of the record prepared by the SEC’s staff, it appears that the SEC believed that alternatives (3), (4), and (5) had widespread support among commenters. However, the record reveals that there was never much organized or documented support for those alternatives. The appellees and the District Court did not treat them as significant. Alternative (2) was the early suggestion of Sonde & Pitt, supra. It received serious consideration but, after further comments, was rejected in Securities Act Release No. 5704 (May 6, 1976), 41 Fed.Reg. 21632 (1976). Alternative (1) was the proposal of appellees herein. The Commission rejected it for the following reasons, 40 Fed.Reg. at 51662: We reject the first of these, proposed by the Natural Resources Defense Council, for a number of reasons. First, the interest among investors that may exist appears to be primarily in whether corporations are acting in an environmentally unacceptable manner, rather than in whether, and to what extent, corporations have gone beyond what is expected of them in this area. Second, unless existing environmental standards may be used as a reference point, both the costs to registrants and the administrative burdens involved in the proposed disclosure would be excessive. There appears to be no established, uniform method by which the environmental effects of corporate practices may be comprehensively described. Nor does there appear to be scientific agreement as to the harmfulness to the environment of many activities. It appears, therefore, that the proposed disclosures would be extremely voluminous, subjective and costly to all concerned. They also would not lend themselves to comparisons of different companies, which is of great importance to investors since investment decisions essentially involve a choice between competing investment alternatives. Moreover, there appears to be virtually no direct investor interest in voluminous information of this type. Proponents, apparently conceding this, suggest that the disclosures be contained in documents which are filed with the Commission but which are not furnished directly to investors. They claim that analysts will study the materials and report their conclusions to investors in some meaningful, understandable form. This would merely substitute the opinions of such analysts, however, for the standards established by and pursuant to federal environmental legislation. And although diversity of viewpoint may be generally desirable, we have concluded that the additional costs and burdens necessary to achieve such diversity in this area greatly outweigh resulting benefits to investors and to the environment. . . . The SEC addressed the two inquiries posed by the District Court’s remand order with particular reference to the environmental disclosure problem. It found indirect indications of investor interest and concluded that the main concern of investors with such information was “in determining how to vote their proxies or otherwise to act to influence management policies, rather than to make investment decisions.” Id. at 51664. It concluded that the disclosure would probably have some effect on corporate behavior to the benefit of the environment, id. at 51665: It seems clear that investors do not at present have ready access to objective information concerning the environmental practices of corporations. And although the relevant compliance reports are reasonably accessible to inhabitants of the localities most directly affected by such practices, there is presently no single governmental source to which an investor can look for the environmental reports filed by a company. Given the fact that there is a degree of interest among some investors in information regarding corporate environmental practices, we conclude that the availability of such information may result in some investor or shareholder action. Participants in the proceeding pointed out that the submission of and voting on socially-oriented shareholder proposals has often caused a corporation to alter its behavior even though the proposals are defeated by a wide margin. Many participants also believe that disclosure requirements would serve to focus management attention on environmental issues and result in clearer recognition of the future costs and legal problems associated with environmental degradation. The Commission determined, finally, not to adopt appellees’ equal employment proposals, although it noted that “[w]e will, of course, continue to reevaluate the need for such requirements from time to time.” Id. at 51667. The Commission argued that existing disclosure provisions — which included rules explicitly requiring disclosure of certain economically material equal employment information — were sufficient to satisfy the primarily economic concerns of participants in the rulemaking proceeding. Id. at 51665 — 66. Further, it observed that: In the instant proceeding, over 100 different “social matters” were submitted in which “ethical” investors were said to be interested. As against this bewildering array of special causes, it has been suggested that investors are at least entitled to information regarding matters which embody fundamental national social principles as reflected in federal legislation or court decisions. We believe that persuasive arguments can be made, however, [that a] substantial amount of federal legislation to some extent embodies fundamental national social principles and, accordingly, many topics of social concern would remain. Thus, there is no distinguishing feature which would justify the singling out of equal employment from among the myriad of other social matters in which investors may be interested in the absence of a specific mandate comparable to that of NEPA. Disclosure of comparable non-material information regarding each of these would in the aggregate make disclosure documents wholly unmanageable and would significantly increase the costs to all involved without, in our view, corresponding benefits to investors generally. Id. at 5166 (footnote omitted). In addition to these broader objections to requiring disclosures of non-material equal employment information, the Commission raised a number of arguments against the specifics of appellees’ proposals. It concluded that requiring disclosure of all equal employment opportunity proceedings, re-gardless of scope, would fail to screen out obviously frivolous or inflated claims. With regard to the appellees’ proposal that registrants be required to file EEO-1 Reports containing statistical data about their work force composition, the Commission concluded that such disclosure was undesirable because “meaningful interpretation is dependent upon sophisticated analysis and other information such as the makeup of the available labor pools and existing hiring and promotion practices.” Id. Following the SEC’s rejection of appellees’ proposals, the parties cross-moved in the District Court for summary judgment. The District Court granted appellees’ motion, NRDC II, supra, finding the SEC’s action arbitrary and capricious on three principal grounds. First, and most important, the Court found it arbitrary that the Commission failed to consider the possibility of requiring disclosure of environmental information to shareholders (persons presently owning shares of a registrant corporation) solely in connection with proxy solicitations and information statements (provided to shareholders in connection with annual or other meetings) in order to promote “fair opportunity for the operation of corporate suffrage” without requiring identical disclosure in registration statements, prospectuses, and the like. 432 F.Supp. at 1205, quoting Securities Act Release No. 5627, quoting SEC v. Transamerica Corp., 163 F.2d 511, 518 (3d Cir. 1947), cert. denied, 332 U.S. 847, 68 S.Ct. 351, 92 L.Ed. 418 (1948). Second, the District Court found that the SEC’s various assessments of costs to corporations and administrative burdens “all merely stand as bald assertions by the Commission,” which the SEC had not substantiated, nor shown any serious effort in minimizing, before concluding they were excessive. Id. at 1206. Third, by refusing to work with the Council on Environmental Quality (CEQ) in developing SEC disclosure guidelines, but instead finding that comprehensive disclosure was the concern of CEQ and the Environmental Protection Agency in their own domain, the Commission violated the requirements of NEPA that it work together with CEQ on its own activity, thus “shunt[ing] aside [NEPA duties] in the bureaucratic shuffle.” Id. at 1207, quoting Flint Ridge Development Co. v. Scenic Riv ers Ass’n, 426 U.S. 776, 787, 96 S.Ct. 2430, 49 L.Ed.2d 205 (1976). The District Court also concluded that the Commission’s determinations with respect to equal employment disclosure were arbitrary and capricious. The Commission, in the Court’s view, had “made no attempt to analyze either the economic significance of equal employment opportunity matters or the costs and/or feasibility of devising appropriate disclosure guidelines.” NRDC II, supra, 432 F.Supp. at 1210 (emphasis in original). Second, the Court found that, as in the environmental disclosure area, the Commission had failed properly to analyze the benefits and costs of equal opportunity disclosure in the limited context of proxy solicitations and information statements. Finally, the Court criticized the Commission’s conclusion that disclosure of EEO-1 data would require sophisticated analysis in order for meaningful conclusions to be drawn about a registrant’s susceptibility to equal employment opportunity litigation, finding itself “unable, on the basis of the record before it, to assess whether this ‘need for sophisticated analysis’ is a relevant consideration and how it compares for example, with the need for sophisticated analysis of various financial disclosures.” Id. at 1212. Following the ruling of the District Court, the SEC appealed to this court. The District Court stayed the execution of its remand order pending the outcome on appeal. II A. All but one appellee have alleged that either they or their members own corporate shares that they would like to vote in a financially prudent and ethically sound manner. This allegation was sufficient to establish their standing to bring suit. Their interest was judicially cognizable, personal to them, and was arguably impaired by the lack of equal employment or environmental information. It was not mere speculation that the relief sought — judicial determination that the SEC acted unlawfully or arbitrarily in denying the rulemaking petition— would lead to the promulgation of rules identical or similar to those requested, or that corporations subject to such rules would comply with them when promulgated. Moreover, we have no doubt that these appellees, as corporate shareholders concerned about environmental quality, are within the broad' zones of interest of both NEPA and the securities acts. B. The Commission next urges that the District Court erred because the SEC’s decision not to adopt rules was nonreviewable. Under section 10 of the APA, 5 U.S.C. § 701(a), agency actions are judicially reviewable “except to the extent that — (1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law.” This section creates a strong presumption of reviewability that can be rebutted only by a clear showing that judicial review would be inappropriate. Dunlop v. Bachowski, 421 U.S. 560, 567, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). We think that judicial review was not precluded by the first section 701(a) exception. Neither the securities acts nor the APA, either expressly or by implication, evidence anything approaching a clear and convincing legislative intent to negate review. At most, the SEC has pointed to some material in the legislative history of the APA that, even given the construction most favorable to the Commission’s position, is inapposite to the present case. The second exception, that for actions committed to agency discretion by law, applies to those rare instances where “ ‘statutes are drawn in such broad terms that in a given case there is no law to apply.’ ” Citizens to Preserve Overton Park, supra, 401 U.S. at 410, 91 S.Ct. at 821. In practice, the determination of whether there is “law” to apply necessarily turns on pragmatic considerations as to whether an agency determination is the proper subject of judicial review. See Langevin v. Che nango Court, Inc., 447 F.2d 296 (2d Cir. 1971); Medical Committee for Human Rights v. SEC, 139 U.S.App.D.C. 226, 234, 432 F.2d 659, 667 (1970), vacated and remanded with instructions to dismiss as moot, 404 U.S. 403, 92 S.Ct. 577, 30 L.Ed.2d 560 (1972); Saferstein, Nonreviewability: A Functional Analysis of “Committed to Agency Discretion,” 82 Harv.L.Rev. 367 (1968). In making this determination, we first identify as precisely as possible the aspects of the agency’s action against which challenge is brought. We then evaluate the relevance of three particularly important factors: the need for judicial supervision to safeguard the interests of the plaintiffs; the impact of review on the effectiveness of the agency in carrying out its congressionally assigned role; and the appropriateness of the issues raised for judicial review. See Hahn v. Gottlieb, 430 F.2d 1243 (1st Cir. 1970). Finally, we inquire whether the considerations in favor of nonreviewability thus identified are sufficiently compelling to rebut the strong presumption of judicial review. Appellees’ challenge, upon analysis, can be seen to rest upon two somewhat different grounds. The first is that the SEC allegedly failed to comply with certain procedures mandated by NEPA. In this category are the contentions that the SEC neglected to consult properly the CEQ and that it failed to consider the alternatives of environmental disclosure rules limited to proxy material. Although these arguments are “essentially procedural,” see Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978), the latter one necessarily involves a substantive element. If the court is to determine whether an agency has fulfilled its procedural NEPA duties by “considering” alternatives, it must exercise at least a minimal scrutiny over the rationality of the agency’s reasons for rejecting likely alternatives. To this extent at least, appellees’ NEPA contentions can be thought of as raising mixed questions of substance and procedure. The second ground is purely substantive argument that the Commission’s ultimate decision not to adopt the particular rules suggested by appellees was arbitrary and capricious. In this category falls appellees’ entire challenge to the SEC’s decision not to adopt equal employment rules, as well as their contention that the agency’s analysis of the costs and benefits of environmental disclosure was not supported in the administrative record. We distinguish between these grounds because, in our view, the reviewability analysis is quite different in the two cases. The first ground — appellees’ procedural NEPA challenge — presents little difficulty. Congress, in NEPA, has commanded federal agencies, “to the fullest extent possible,” NEPA section 102, 42 U.S.C. § 4332, to consider alternatives and consult with CEQ. Congress having imposed these duties on the SEC, appellees can argue with considerable force that their rights as participants in the rulemaking proceeding have been infringed by the SEC’s alleged failures. The SEC’s effectiveness in carrying out its mandate will not, in our view, be greatly impaired by judicial review of its procedural compliance with NEPA. For one thing, NEPA made environmental considerations part of the SEC’s mandate, NAACP v. FPC, 172 U.S.App.D.C. 32, 42, 520 F.2d 432, 442 (1975), aff’d, 425 U.S. 662, 96 S.Ct. 1806, 48 L.Ed.2d 284 (1976), and judicial review should serve to ensure that this aspect of the SEC’s statutory duties is fully implemented. Because such review is essentially procedural, it will not impose undesirable substantive results on the agency. Finally, judicial review in this context will not be a recurring burden on the agency. The SEC represented that these rulemaking proceedings were designed to satisfy fully its NEPA duties. Securities Act Release No. 5569 (Feb. 11, 1975), 40 Fed.Reg. 7013 (1975). In thus compressing the fulfillment of its NEPA duties, the SEC reduced the burden of judicial review to challenges brought to the single rulemaking proceeding, and thereby minimized the potential interference with its activities. Moreover, the issues in this context will generally be appropriately framed for judicial consideration. The function we are here asked to perform — that of evaluating an agency’s procedural compliance with a statutory norm — is within our traditional area of expertise. See Weyerhaeuser Co. v. Costle, 191 U.S.App.D.C. 309 at 328, 590 F.2d 1011 at 1030 (1978). Although, as we have noted, this review will involve some examination of the rationality of the SEC’s decision, we are confident of our ability to perform such substantive scrutiny limited to ensuring that the SEC has fully and in good faith complied with NEPA’s procedural command. Further, because we do not at this point review the rationality of the agency’s ultimate substantive decision, the difficulties inherent in judicial review of an agency’s decision not to adopt proposed rules, see pp. --- of 196 U.S.App. D.C., pp. 1046-1047 of 606 F.2d infra, are not compiling in this context. Because our review is limited to ensuring that statutorily prescribed procedures have been followed, we are confident that the administrative record will usually be sufficient to ensure meaningful review. Thus, especially in light of the presumptiom of reviewability, we conclude that the question of the'SEC’s compliance with NEPA procedures was appropriate for judicial review. Appellees’ challenge to the rationality of the SEC’s decision not to adopt their proposed environmental and equal employment rules, however, presents a somewhat different calculus of interests among plaintiffs, agency, and court. This is so largely because the agency, in our view, was under no obligation to adopt rules identical to or even similar to those sought by appellees. As we note in part II-C infra, the Commission has been vested by Congress with broad discretionary powers to promulgate (or not to promulgate) rules requiring disclosure of information beyond that specifically required by statute. Rather than casting disclosure rules in stone, Congress opted to rely on the discretion and expertise of the SEC for a determination of what types of additional disclosure would be desirable. Although Congress, in NEPA, made environmental considerations part of the SEC’s substantive mission, we do not believe that NEPA goes so far as to require the SEC to promulgate specific rules. See Vermont Yankee, supra, 435 U.S. at 558, 98 S.Ct. 1197; Calvert Cliffs’ Coordinating Committee v. AEG, 146 U.S.App.D.C. 33, 36, 449 F.2d 1109, 1112 (1971). The interest of plaintiffs in this context will thus rarely present unusual or compelling circumstances calling for judicial review. In the present case, for example, the SEC has not invaded any of appellees’ substantive statutory or constitutional rights, nor singled them out for special and seemingly unfair treatment, nor even, indeed, taken any action to alter the status quo ante. Judicial review will, to a limited extent, interfere with an agency’s effective performance of its statutory mission. Requiring an agency to defend in court its decision not to adopt proposed rules will divert scarce institutional resources into an area that the agency in its expert judgment has already determined is not even worth the effort already expended. The danger of throwing good money after bad, moreover, also exists in a more subtle form because the very prospect of litigation may cause the agency to give a proposal more elaborate consideration than it might actually merit. These considerations, however, are more compelling in the context of judicial review of an agency’s denial of the initial rulemaking petition than where, as here, the agency has granted the petition and held extensive rulemaking proceedings. Obviously frivolous or unworkable proposals can be weeded out at the outset simply by denying the petition. When an agency agrees to conduct rulemaking proceedings, it evidences its view that the proposals are sufficiently meritorious to warrant further investigation, as well as its willingness to defend in court such rules as may eventually be adopted. Thus, judicial review in this context would/, be retatively-infrerpient; 'WOtrldnot bejinjustifiable-in terms of the merits of the proposals, and would not, in our view, seriously interfere with the agency’s budget and personnel planning. Further, we note that “there is a substantial public interest in having important questions of corporate democracy raised before the Commission and the courts by interested, responsible private parties.” Medical Committee, supra, 139 U.S.App. D.C. at 234, 432 F.2d at 667. In the present case, appellees have brought to the Commission’s attention a perspective, different from that of most of its registrant corporations, that it might not otherwise have fully appreciated. They have performed the public service of causing the Commission to re-examine its disclosure policies in light of the fundamental national priorities expressed in NEPA and in federal equal employment legislation. Cf. NAACP v. FPC, supra. Judicial review of agency decisions not to adopt rules would help ensure that the .agency gives, due consideration to citizen_,participation and in this sense might actually enhance the agency’s effectiveness in furthering the public interest. Perhaps the strongest argument against reviewability is the concern that the issues posed will often not be well-suited for judicial resolution. An agency’s discretionary decision not to regulate a given activity is inevitably based, in large measure, on factors not inherently susceptible to judicial resolution — e. g., internal management considerations as to budget and personnel; evaluations of its own competence; weighing of competing policies within a broad statutory framework. Cf. FPC v. Transcontinental Gas Pipe Line Corp., 423 U.S. 326, 333, 96 S.Ct. 579, 46 L.Ed.2d 533 (1976) (per curiam). Further, even if an agency considers a particular problem worthy of regulation, it may determine for reasons ' lying within its special expertise that the time for action has not yet arrived. Cf. SEC v. Chenery Corp., 332 U.S. 194, 202-03, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). The area may be one of such rapid technological development that regulations would be outdated by the time they could become effective, or the scientific state of the art may be such that sufficient data are not yet available on which to premise adequate regulations. Cf. Industrial Union Department v. Hodgson, 162 U.S.App.D.C. 331, 338-39, 499 F.2d 467, 474-75 (1974). The circumstances in the regulated industry may be evolving in a way that could vitiate the need for regulation, cf. Action for Children’s Television v. FCC, 183 U.S.App.D.C. 437, 459, 564 F.2d 458, 480 (1977), or the agency may still be developing the expertise necessary for effective regulation, cf. SEC v. Chenery Corp., supra, 332 U.S. at 202, 67 S.Ct. 1575. Moreover, added to the problems already inherent in reviewing the record support for informal rulemaking decisions is the additional concern that, in the context of an agency’s non-adoption of a rule, the record and reasons statement will be of little use to a reviewing court unless they are narrowly focused on the particular rule advocated by plaintiff or petitioner. There are an infinite number of rules that an agency could adopt in its discretion; unless the agency has carefully focused its considerations, judicial review will have an undesirably abstract and hypothetical quality. However, in a context like the present one, in which the agency has in fact held extensive rulemaking proceedings narrowly focused on the particular rules at issue, and has explained in detail its reasons for not adopting those rules,|we believe that the questions posed will be amenable to at least a minimal level of judicial scrutiny. Our conclusion is buttressed by two recent cases in which this court reviewed agency decisions not to promulgate rules. National Black Media Coalition v. FCC, 191 U.S.App.D.C. 55, 589 F.2d 578 (1978), was a challenge to an FCC decision not to adopt certain quantitative program standards for television broadcasters involved in comparative renewal proceedings. The standards had been proposed in detail by the FCC and had been the subject of extensive rulemaking proceedings, lasting six years and involving oral argument and extensive written comments. Although noting that “[t]he decision not to promulgate quantitative standards was a policy judgment traditionally left to agency discretion,” id. at 58, 589 F.2d at 581, the court reviewed the FCC’s decision on the merits without explicitly considering the reviewability question. Action for Children’s Television, supra, was a challenge to an FCC decision not to adopt certain rules proposed by a public interest organization to improve children’s television. As in National Black Media Coalition, the FCC held extensive rulemaking proceedings focused on the particular rules suggested. Again without explicitly considering the issue of reviewability, the court proceeded to uphold the FCC on the merits. These cases, in our view, do not support a general rule that discretionary agency decisions not to adopt rules are reviewable per se. In this situation, as we have noted, the relevant factors incline against reviewability: the interests of the plaintiffs are usually not compelling, there is a possibility of some minor interference with effective agency performance, and the issues will often be poorly suited for judicial resolution. Rather, Action for Children’s Television and National Black Media Coalition stand for the more limited principle that, in light of the strong presumption of reviewability, discretionary decisions not to adopt rules are reviewable where, as here, the agency has in fact held a rulemaking proceeding and compiled a record narrowly focused on the particular rules suggested but not adopted. C. It has been said that courts and administrative agencies function, not as “wholly independent and unrelated instrumentalities of justice,” United States v. Morgan, 307 U.S. 183, 191, 59 S.Ct. 795, 799, 83 L.Ed. 1211 (1939), but as “partners” in furtherance of the public interest. Kennecott Copper Corp. v. EPA, 149 U.S.App.D.C. 231, 233-34, 462 F.2d 846, 848-49 (1972); Greater Boston Television Corp. v. FCC, 143 U.S. App.D.C. 383, 393, 444 F.2d 841, 851 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). In this collaborative enterprise, the courts are often asked to depart from traditional modes of judicial decisionmaking and to assume an essentially legislative role. The partnership, if indeed that concept be at all apt, is thus an “uneasy” one at best, Industrial Union Department v. Hodgson, 162 U.S.App.D.C. 331, 333, 499 F.2d 467, 469 (1974); Associated Industries v. Department of Labor, 487 F.2d 342, 354 (2d Cir. 1973), as courts struggle to perform their congressionally-mandated task of judicial review without encroaching on territory which as judges they are ill-suited to enter. The balance to be struck is that between the goal of efficient and effective agency action, on the one hand, and the value of judicial review in ensuring the rationality and fairness of agency decision-making, on the other. Congress recognized the need for such a balance when it enacted the various judicial review provisions in section 10(e) of the APA, 5 U.S.C. § 706. Thus, in the area of traditional judicial preeminence, that of determining pure questions of law, Congress commanded an exacting judicial scrutiny. Id. §§ 10(e) (2)(B), (C), (D), 5 U.S.C. §§ 706(2)(B), (C), (D). But Congress also understood that administrative agencies were more competent than the courts in many specialized areas of fact determination, and particularly in making quasi-legislative judgments about matters of social and economic policy. It recognized this in the APA by requiring the courts to exercise considerable deference in their review of such issues. Id. §§ 10(e)(2)(A), (E), 5 U.S.C. §§ 706(2)(A), (E). As we have previously noted, see Part II-B supra, the present case involves both a challenge to the SEC’s procedural compliance with NEPA and a claim that the substantive result of the SEC’s procedures, in both the equal employment and environmental areas, was arbitrary and capricious. The proper scope of judicial review is, we think, quite different in these two aspects of the case. The procedural NEPA challenge is essentially a claim that the SEC’s decision-making was “without observance of procedure required by law,” section 10(e)(2)(D) of the APA, 5 U.S.C. § 706(2)(D). Our review of an agency’s procedural compliance with statutory norms is an exacting one. Moreover, the courts, in cases involving NEPA’s environmental impact statement requirement, have exercised particularly stringent review of procedural compliance with NEPA, W. Rodgers, Environmental Law 716-717 (1977), at least when the agency involved does not include environmental protection within its primary mission, see Leventhal, Environmental Decisionmaking and the Role of the Courts, 122 U.Pa.L.Rev. 509 (1974). To be sure, we deal here, not with NEPA’s often-litigated environmental impact statement provision, but with other relatively uncharted provisions of NEPA section 102. These provisions, because they are not limited to “major” federal actions that “significantly affect[ ] the quality of the human environment," are of far broader applicability than the impact statement requirement. For this reason the stringency of review applied in the impact statement situation may not be entirely feasible here. But see Calvert Cliffs’ Coordinating Committee, supra. Nevertheless, we recognize that environmental concerns to some extent run counter to the SEC’s primary mandate of financial protection of investors, and that there is here a substantial role for the court to play in ensuring that NEPA’s procedural commands are carried out in full measure by the SEC. In contrast to this exacting review of the SEC’s compliance with NEPA procedures, our review of the substantive rationality of the SEC’s decision not to adopt appellees’ proposed environmental and equal employment rules is necessarily far more circumscribed in scope. The Commission’s decision in the present case is the product of the informal rulemaking procedures of section 4 of the APA, 5 U.S.C. § 553, and is to be reviewed under section 10(e)(2)(A) of the Act, 5 U.S.C. § 706(2)(A). Vermont Yankee, supra, 435 U.S. at 535-36 n. 14, 98 S.Ct. 1197 n. 4; FCC v. National Citizens Committee, 436 U.S. 775, 802-03, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978); Weyerhaeuser Co. v. Costle, 191 U.S.App.D.C. 309, at 322, 590 F.2d 1011, at 1024 (1978). That provision requires us to set aside “agency action, findings, and conclusions,” found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” As we have recognized, “arbitrary,” “capricious,” and “abuse of discretion” are “far from being entirely discrete as a matter of the ordinary meaning of language, and, indeed, are in some respects cumulative' rather than differential in their applicability.” Weyerhaeuser Co. v. Costle, supra, at 322, 590 F.2d at 1024. Rather than denoting a fixed template to be imposed mechanically on every case within their ambit, these words summon forth what may best be described as an attitude of mind in the reviewing court— one that is “searching and careful,” Citizens to Preserve Overton Park, supra, 401 U.S. at 416, 91 S.Ct. 814, yet, in the last analysis, diffident and deferential. In applying the “arbitrary and capricious” standard, it is well to keep in mind the considerations that led Congress to commit to the courts a “multifaceted review function.” Weyerhaeuser Co. v. Costle, supra, 191 U.S.App.D.C. at 322, 590 F.2d at 1024. As we noted in Weyerhaeuser, id. at 323, 590 F.2d at 1025, “[d]ue concern both for the intent of Congress in drafting the particular statute at issue, and, more generally, for the ‘boundaries between the legislative and judicial function,’ Industrial Union Dep’t v. Hodgson, 162 U.S.App. D.C. 331, 339, 499 F.2d 467, 475 (1974), often demands that we exercise certain aspects of our review function with more circumspection than is appropriate to others.” Some facets of an administrative decision, because they raise issues within the courts’ area of competence, are well suited to judicial oversight. Without abandoning completely our attitude of deference, and thereby depriving the words “arbitrary” and “capricious” of any meaning, see Vermont Yankee, supra, 435 U.S. at 554, 98 S.Ct. 1197, we can review these issues with confidence that our participation will contribute to the rationality and fairness of agency decisionmaking without detracting unduly from its effectiveness. Other aspects of administrative action, however, are poorly suited for judicial scrutiny, and, without sacrificing our statutory duty of review, we must as to these issues exercise a high degree of deference to the agency’s determination. In short, the concept of “arbitrary and capricious’’ review defies generalized application and demands, instead, close attention to the nature of the particular problem faced by the agency. The stringency of our review, in a given case, depends upon analysis of a number of factors, including the intent of Congress, as expressed in the relevant statutes, particularly the agency's enabling statute; the needs, expertise, and impartiality of the agency as regards the issue presented; and the ability of the court effectively to evaluate the questions posed. Only through such a flexible approach can we review the multifarious types of agency actions as responsible participants in an enterprise of practical governance. We note, first, that Congress, in the 1933 and 1934 Acts, has seen fit to delegate broad rulemaking authority to the SEC, These acts were passed during an unprecedented economic crisis in which regulation of the securities markets was seen as an urgent national concern. The SEC, charged with swiftly and effectively implementing this national policy, was necessarily given very broad discretion to promulgate rules governing corporate disclosure. The degree of discretion accorded the Commission is evident from the language in the various statutory grants of rulemaking authority. The legislative history of the 1934 Act, the statute that created the SEC, reflects the breadth of the Commission’s intended discretion. The House Report stated that the delegation [of authority to the Federal Trade Commission (which was to administer the act as the bill was then drafted) is] made only with the indication of such maximum standards for discretion as, in the considered judgment of the Committee, the technical character of the problems to be dealt with would permit. The bill legislates specifically just as far as the Committee feels it can. The original bill submitted to the Committee dealt very specifically and definitely with a number of admitted abuses. In many cases, however, the argument was made that while the solutions offered might be correct, their effects were so far-reaching as to make it inadvisable to put these solutions in the form of statutory enactments that could not be changed in case of need without Congressional action. . It is for that reason that the bill in dealing with a number of difficult problems singles out these problems as matters appropriate to be subject to restrictive rules and regulations, but leaves to the administrative agencies the determination of the most appropriate form of rule or regulation to be enforced. In a field where practices constantly vary and where practices legitimate for some purposes might be turned to illegitimate and fraudulent means, broad discretionary powers in the administrative agency have been found [to be] practically essential. H.R.Rep.No. 1383, 73d Cong., 2d Sess. 6-7 (1934). The same theme is echoed in the Senate Committee report: so delicate a mechanism as the modern stock exchange cannot be regulated efficiently under a rigid statutory program. Unless considerable latitude is allowed for the exercise of administrative discretion, it is impossible to avoid, on the one hand, unworkable “strait-jacket” regulation and, on the other, loopholes which may be penetrated by slight variations in the method of doing business. S.Rep.No. 792, 73d Cong., 2d Sess. 5 (1934). Similarly, in discussing the Commission’s power to require disclosure in corporate reports, the Senate Committee noted that [t]he Commission is given complete discretion ... to require in corporate reports only such information as it deems necessary or appropriate in the public interest or to protect investors. Id. at 10. These inferences supporting deferential review drawn from the Securities Acts are supplemented by other considerations, implicit in the APA, as to the court’s ability to review effectively the SEC’s decision. As is typical in informal rulemaking cases under section 4 of the APA, 5 U.S.C. § 553, many of the issues raised here are within the province of agency expertise and do not readily lend themselves to judicial oversight. The SEC, for example, attempted to quantify as nearly as possible the extent of “ethical investor” interest in the information sought by appellees. Because of the nature of this inquiry, precise quantification is difficult if not impossible; and the court must necessarily defer to the SEC’s judgment based on experience in evaluating the evidence of record on this question. Other factual issues required the Commission to make forecasts — e. g., the probable burden on corporations of complying with the proposed rules; the extent to which the added mass of information would confuse or mislead the average investor; and the likelihood that disclosure of the type requested would cause corporations to adopt sounder environmental policies. Predictive judgments like these “necessarily involve[] deductions based on the expert knowledge of the agency,” FCC v. National Citizens Comm., supra, 436 U.S. at 814, 98 S.Ct. at 2122, quoting FPC v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 29, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961), and, moreover, tend to be infused with policy considerations that are not appropriate subjects of close judicial scrutiny. Bradford National Clearing Corp., supra, 191 U.S.App.D.C. at 402 & n. 30, 590 F.2d at 1104 & n. 30. Finally, we must also inevitably be more circumspect in our review when, as here, it is based on a record of an informal rulemaking proceeding. The record presented to us on appeal or petition for review is a sump in which the parties have deposited a sundry mass of materials that have neither passed through the filter of rules of evidence nor undergone the refining fire of adversarial presentation. Industrial Union Dep’t, supra, 162 U.S.App.D.C. at 338, 499 F.2d at 474. The lack of discipline in such a record, coupled with its sheer mass — even when reduced into a joint appendix — often makes the record of informal rulemaking a less than fertile ground for judicial review. Weyerhaeuser Co. v. Costie, supra, 192 U.S.App.D.C. at 90, 590 F.2d at 1206. We find support for these considerations in the fact that this case involves an agency decision not to adopt a rule. As discussed in Part II-B supra, this peculiar context led us to inquire seriously whether the SEC’s decision was reviewable at all. Yet the question of reviewability cannot be divorced from that of scope of review. In cases where courts have evidenced serious doubts about the reviewability of agency action, they have tended to couple their decision to review with a particularly narrow scope of review. See Dunlop v. Bachowski, 421 U.S. 560, 568, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975); Medical Committee, supra, 139 U.S. App.D.C. at 241-42, 432 F.2d at 674-75. Thus, the considerations that counsel against judicial review of a decision not to adopt rules by informal rulemaking also call for us, when we do review, to exercise special deference. We are not unmindful of the fact that the SEC, in good faith compliance with the District Court’s decision in NRDC I, has already held further proceedings even more extensive than those involved in its initial decision not to adopt the rules sought by appellees. Before we once more remit the case to the Commission, and thereby further divert its resources from areas that in its expert judgment are of more pressing concern, we should make doubly sure that the SEC’s decision is, in fact, not sustainable on the administrative record. Similarly, we note that the environmental rules requested by appellees were only one of several alternatives considered by the Commission in this rulemaking proceeding. Although these rules were, indeed, the primary subject of the proceeding, the existence of other alternatives did tend to defocus the record and render it even less amenable to judicial review than are such records typically. In light of these considerations, the scope of our review is best defined as follows: We will exercise relatively careful scrutiny to ensure that the SEC has scrupulously followed NEPA procedures, in particular, the requirement of consultation with CEQ and the command to consider alternatives. As part of this oversight we will demand that the Commission consider reasonably obvious alternative disclosure rules, and explain its reasons for rejecting alternatives in sufficient detail to permit judicial review. At the same time, however, our review of the Commission’s factual, and particularly its policy, determinations will perforce be a narrow one, limited to ensuring that the Commission has adequately explained the facts and policy concerns it relied on and to satisfying ourselves that those facts have some basis in the record. Finally, we must see “whether those facts and legislative considerations by themselves could lead a reasonable person to make the judgment that the Agency has made.” Weyerhaeuser Co. v. Costle, supra, 191 U.S. App.D.C. at 325, 590 F.2d at 1027. Ill A. Appellees’ strongest challenge to the SEC’s decision, and the District Court’s primary basis for remanding the decision to the SEC for further proceedings, was that the agency “failed to consider the possibility of requiring disclosure of environmental information to shareholders . . . solely in connection with proxy solicitations and information statements (provided to shareholders in connection with annual or other meetings) in order to promote ‘fair opportunity for the operation of corporate suffrage’ . . . .” NRDC II, supra, 432 F.Supp. at 1205. As to this essentially procedural issue, as we have noted, we will exercise a relatively stringent review to ensure that the SEC fully complied with the statutory directive to consider alternatives. Nevertheless, although the question is not insubstantial, we conclude, for several reasons, that the SEC was not required under NEPA to consider a limited proxy disclosure rule. In NRDC, Inc. v. Morton, 148 U.S.App. D.C. 5, 458 F.2d 827 (1972), this court formulated the test of agency obligation to consider an alternative under NEPA. We there said that any such requirement is subject to a “rule of reason”, id. at 12, 458 F.2d at 834, under which a “crystal ball” inquiry is not required, id. at 15, 458 F.2d at 837. “The statute must be construed in the light of reason if it is not to demand what is, fairly speaking, not meaningfully possible, given the obvious, that the resources of energy and research — and time — available to meet the Nation's needs are not infinite.” Id. Nevertheless, under the rule of reason, the agency is not released from its obligation to consider alternatives “to the fullest extent possible,” section 102 of NEPA, 42 U.S.C. § 4332. As the concept of reasonableness implies, the rule is one of moderation, neither rubber nor iron. The Morton case itself is an illustration: We there required, in the environmental impact statement prepared in connection with a sale of oil and gas lease tracts, that the preparing agency consider the alternative of eliminating oil import quotas although this action was beyond its authority; but we did not require consideration of other, speculative “alternatives” such as desulfurization of coal, oil shale development, and the like. Although Morton involved NEPA’s impact statement provision, we think the rule of reason is sufficiently flexible as to be applicable to the present case. Thus, we must determine whether the alternative of requiring environmental disclosure limited to proxy materials and related information statements was “readily identifiable by the agency,” NRDC v. Morton, supra, 148 U.S.App.D.C. at 15, 458 F.2d at 837. We conclude that, for a number of reasons, the Commission was not obligated to consider the proxy alternative in this proceeding. First, we note that this alternative was not strongly pressed on the Commission during the round of comments. This fact does not in itself release the SEC from its obligation to consider readily identifiable alternatives. Because NEPA serves a broad public purpose, and imposes on federal agencies an independent duty to take action irrespective of private initiation or input, a strict waiver rule would be inappropriate. However, the failure of the participants to focus specifically on the proxy disclosure alternative does have considerable bearing on whether this option was readily identifiable by the SEC. Second, an agency is not required, under NEPA, to consider alternatives when such consideration would serve no purpose. Thus, an agency need not consider in its impact statement alternatives with consequences indistinguishable from the action proposed. Citizens for Safe Power v. NRC, 173 U.S.App.D.C. 317, 327-28, 524 F.2d 1291, 1301-02 & n.18 (1975); Iowa Citizens for Environmental Quality, Inc. v. Volpe, 487 F.2d 849, 852-53 (8th Cir. 1973). The instant case presents the analogous situation of an agency’s failure to consider an alternative that is subject to the same or similar defects as another alternative it has explicitly considered and rejected. Several of the Commission’s reasons for rejecting across-the-board disclosure are equally apposite to the proxy disclosure alternative. The Commission concluded, for example, that investors — even “ethical” investors — were typically uninterested in the type of comprehensive disclosure advocated by appellees. 40 Fed.Reg. at 51662. It also voiced concern that the sheer bulk of disclosure documents would make them confusing to the average investor and would tend to obscure important information. Id. at 51660 & n.27. These are the type of predictive or legislative factual judgments as to which our review is necessarily circumscribed. We cannot, on this record, say that the Commission’s conclusions on these questions were so unsound as to indicate a failure to fulfill the procedural NEPA duty of considering reasonably identifiable alternatives. Because these conclusions militate against proxy disclosure no less than against across-the-board disclosure, we are reluctant to require the Commission to engage in what would appear to be the futile exercise of considering the proxy alternative. The Commission’s other reasons for rejecting across-the-board disclosure strongly support this conclusion, although we recognize that they do not apply with precisely the same force to the proxy area. Proxy disclosure, for example, would involve less printing and processing costs, and would therefore impose a somewhat reduced burden on agencies and registrants. See 40 Fed.Reg. 51662. However, the principal burdens of comprehensive disclosure — preparing the disclosure materials, by the corporation, and evaluating their adequacy, by the agency — would not be significantly reduced in the ease of proxy disclosure. Proxies, in addition, are not primarily designed to facilitate the type of inter-corporate comparisons that the SEC concluded were infeasible under appellees’ comprehensive disclosure scheme. See id. Again, however, the Commission’s reasoning militates against proxy disclosure to the extent that such materials are used in the investment community for inter-corporate comparisons. Our third reason for not requiring the Commission to consider proxy disclosure is the fact that, several months