By Isla Binnie
NEW YORK (Reuters) – Wall Street’s top regulator has stayed new climate-related disclosure requirements pending judicial review, the agency said in a statement on Thursday, after criticism from across the political spectrum.
The Securities and Exchange Commission’s (SEC) first-of-its-kind regulation on how companies share certain climate-related risks with investors had attracted multiple lawsuits.
The SEC said it has exercised its discretion to stay the final rules pending a review in the Eighth Circuit U.S. Court of Appeals.
Republican-led states, energy industry companies and business groups say the rules amount to environmental regulation and therefore overstep the SEC’s legal mandate.
On the other side, environmental groups including the Sierra Club and Natural Resources Defense Council have said the rules do not go far enough. A more stringent initial draft was diluted.
That draft attracted a deluge of comment letters when it was first proposed in March 2022, and the final version, released two years later, will partially define the legacy of SEC Chair Gary Gensler.
It aims to set standards for how companies communicate with investors about greenhouse gas emissions, weather-related risks, and how they are preparing for the transition to a low-carbon economy.
The SEC statement said the agency would continue “vigorously defending” the rules, which it said were consistent with applicable law and within its authority. It noted “procedural complexities” and said a stay would allow “the orderly judicial resolution of those challenges and allow the court of appeals to focus on deciding the merits.”
Other jurisdictions, including the European Union and California, are preparing to implement their own disclosure requirements. California’s rules have also been challenged in court.
(Reporting by Isla Binnie and Chris Prentice; Editing by David Gregorio)
Comments