(The Center Square) – Requiring publicly traded companies to make climate-related disclosures has voluntarily been put on hold by the Securities and Exchange Commission.
The SEC’s move came before a decision was reached by the 8th U.S. Circuit Court of Appeals. John Rady, counsel for the SEC in the case, notified the court in a letter.
The commission’s decision was made, Rady wrote in part, because of “procedural complexities of this litigation” and avoiding “potential regulatory uncertainty” if the rule went into place during the legal challenge.
This means until legal challenges at the 8th Circuit are resolved, registrants are not subject to the newly adopted SEC climate disclosure rules. The phase-in period doesn’t begin until 2025 at the earliest; it is unclear if that will be delayed.
The new rule was to be fully in effect in 2026.
West Virginia Attorney General Patrick Morrisey, in a release, said, “The Biden administration wants to radically transform the SEC run by unelected bureaucrats and make them champions of climate change, regardless of what the agency’s functions are – Biden is creating a federal bureaucracy to suit his agenda. The rule would provide for coordinated discrimination against areas of the country like West Virginia that depend most heavily on fossil fuels for energy.”
Iowa Attorney General Brenna Bird, in a statement, said, “Today’s victory shuts down the most outrageous climate mandate for businesses since Biden took office. The SEC’s job is to protect people from fraud. It has no business slapping companies with extremist climate mandates. We are making it clear that Biden has to follow the law like everyone else.
“By halting this mandate, we are protecting businesses from costly red tape, securing our supply chain, and defending family farms. Next, we are going to make this win permanent!”
In the order, the SEC says it “will continue vigorously defending the final rules’ validity in court and looks forward to expeditious resolution of the litigation.”
The SEC rule was adopted in early March and was to have required publicly-traded companies to inform investors of the climate change-related financial risks of that company’s operations. Those include greenhouse gas emissions, severe weather events, and “other natural conditions” such as rising sea levels.
The SEC says most companies are already providing this information, with 90% of Russell 1000 Index (the top 1,000 stocks traded in the U.S.) already providing information related to climate change and 60% of those on the index issuing data on greenhouse gas emissions such as carbon dioxide.
Following the SEC’s adoption of the new rules, challenges were made at six different federal appellate courts.
On March 21, the federal Judicial Panel on Multidistrict Litigation combined the litigation into one complaint at the 8th Circuit.