Tue, Oct 15 2024
The revolutionary climate disclosure requirements that the SEC issued in early March will no longer be enforced, it has said.
These regulations, which are the first of their kind, according to ESG Today, mandate that public companies operating in the United States submit comprehensive reports detailing the risks associated with climate change that their businesses face, the ways in which they are managing these risks, the financial consequences of extreme weather events, and, in some cases, the greenhouse gas (GHG) emissions that their operations produce. This ruling is made in response to legal challenges the SEC is facing from a number of states and business organizations that contest the legitimacy and viability of the new mandates.
Legal lawsuits were filed in opposition to the SEC's new regulations even before the final rules were made public, demonstrating the force and speed of the opposition. Energy services providers Liberty Energy and Nomad Proppant stand out among the dissenters; they have successfully petitioned a court to halt the regulations while they are reviewed. Along with a move by the U.S. Chamber of Commerce requesting a similar stay, a group of 25 Republican state attorneys general, led by Iowa AG Brenna Bird, have filed a lawsuit contesting the guidelines.
The SEC's rules, according to critics, place undue restrictions on businesses and characterize the data on greenhouse gas emissions that is being requested as being too speculative or inaccurate. Moreover, they argue that these regulations go beyond the regulatory jurisdiction of the SEC. AG Brenna Bird of Iowa sharply condemned the guidelines, calling them a "outrageous climate mandate for businesses" and asserting that the SEC's main duty is to prevent fraud, not to impose climate mandates.
A coalition of 19 Democratic AGs has launched a defense of the SEC's regulation in response to the lawsuit from the Republican states, highlighting the significance of giving investors access to “standardized, comparable, and reliable data” for evaluating climate-related risks.
The SEC is unwavering in its support of the climate disclosure regulations notwithstanding the halt, highlighting their legitimacy and the commission's jurisdiction to impose them. According to the SEC's statement, the interim stay will reduce any ambiguity that might result from enforcing the rules while litigation is still pending and enable an orderly judicial consideration of the legal challenges. The Commission is committed to maintaining the legality of the regulations and the importance of these disclosures for investor protection and openness, which is why it is eager for a prompt judicial decision.
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