SEC Ends Defense of Climate Disclosure Rules
The Securities and Exchange Commission (SEC) on Mar. 27 voted to stop its defense of the rules that require climate-related risks and greenhouse gas emissions disclosures.
“The goal of today’s Commission action and notification to the court is to cease the Commission’s involvement in the defense of the costly and unnecessarily intrusive climate change disclosure rules," SEC Acting Chairman Mark T. Uyeda noted in a release.
Adopted by the SEC on Mar. 6, the rules create a detailed and extensive special disclosure regime regarding climate risks for issuing and reporting companies.
According to Journal of Accountancy, this SEC move was mostly expected Uyeda stated six weeks ago that the SEC had requested added time from the courts to weigh its options.
The SEC's Enhancement and Standardization of Climate-Related Disclosures for Investors, which the AICPA summarized, was meant to be implemented for the fiscal year starting in 2025. It encountered legal challenges on many fronts, which the SEC had agreed beforehand to argue against once the Eighth Circuit set arguments in the consolidated case, the Journal reports.
States and private parties have challenged the rules. The litigation was consolidated in the Eighth Circuit (Iowa v. SEC), and the SEC had previously stayed the rules' effectiveness pending the litigation's completion. Briefing in the cases was completed prior to the change in administrations.
After Mar. 27's SEC vote, its staff sent a letter to the court stating that the SEC withdraws its rules' defense and that the SEC counsel are no longer authorized to advance the arguments in the brief the SEC had filed. The letter states that the SEC yields any oral argument time back to the court.