SEC Stays Climate Disclosure Rules Amid Legal Challenges
Commentary by Kevin Harnisch
The SEC issued an Order staying its climate reporting rules for public companies in light of the fact that "petitions seeking review of the Final Rules were filed in multiples courts of appeals." (See related coverage.) The Order identifies legal changes in the 5th Circuit, the 6th Circuit, the 8th Circuit and the 11th Circuit. The various challenges have now been consolidated in the 8th Circuit.
In the Order, the SEC said that the stay will remain in force as the 8th Circuit reviews legal challenges in order to avoid "potential regulatory uncertainty." The SEC said it would continue "vigorously defending" the validity of its climate rule. The SEC further said that it "is not departing from its view that the Final Rules are consistent with applicable law and within the Commission’s long-standing authority to require the disclosure of information important to investors in making investment and voting decisions."
Commentary
Prior to the consolidation in the 8th Circuit of the multiple legal challenges to the Final Rules, the 5th Circuit had issued a stay. The SEC was likely anticipating that the 8th Circuit would do the same. Many companies may still be subject to the recently enacted California climate disclosure rules and various international disclosure requirements that remain in effect.
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