SEC Pauses Climate Disclosure Rules Amidst Legal Challenges
The U.S. Securities and Exchange Commission announced that it has paused the implementation of its recently released climate disclosure rules requiring companies to report on climate-related risks and greenhouse gas (GHG) emissions, as it awaits a court review of the new rules following a series of legal challenges by several states and business groups.
Despite the decision to pause the rules, however, the SEC said in a statement that it will “continue vigorously defending” the new climate disclosure requirements, which it described as “consistent with applicable law and within the Commission’s long-standing authority.”
The SEC announced the release and adoption of the new rules in early March, 2 years following the Commission’s initial draft release, establishing for the first time requirements for public companies in the U.S. to provide disclosure on climate risks facing their businesses, plans to address those risks, the financial impact of severe weather events, and, in some cases, greenhouse gas emissions originating from their operations.
Right out of the gate, however, and even prior to its final release, the new rule has faced a series of legal challenges, including a court petition filed by energy services companies Liberty Energy and Nomad Proppant, requesting the stay pending a review of the rule, which was granted by the court, as well as a lawsuit against the rule filed by 25 Republican state attorneys general, led by Iowa AG Brenna Bird, and another appeals court motion requesting a stay of the rules led by the U.S. Chamber of Commerce.
