SEC Abdicates Responsibility for Climate Disclosure Rule, Leaving Investors Unprotected
WASHINGTON — In a filing on Wednesday, the U.S. Securities and Exchange Commission (SEC) informed the U.S. Court of Appeals for the Eighth Circuit that the commission does not intend to review or revisit its climate disclosure rules for companies.
Adopted in March 2024, the climate-related financial disclosure rule created the first comprehensive federal transparency requirement for public companies on both physical and transitional climate financial risks as well as greenhouse gas pollution reporting. In March the SEC announced it would no longer defend the rule in court.
In response, Ernesto Archila, climate and financial regulation policy director with Public Citizen’s Climate Program, issued the following statement:
“This latest maneuver in the legal battle over the SEC’s climate disclosure rule illustrates the Commission’s fundamental disrespect, not just for their own rule, but for the rule of law itself and for the investors from Main Street to Wall Street who rely on them to ensure the integrity of capital markets. The move is an insult to their own staff, who produced it at significant cost to meet the high bar for a formal rule required under the law. It is an insult to the American public and regulated markets, who have a right to expect transparency, integrity and rigorous application of the law from their top securities cop.
“Investors, including those who rely on securities for their retirement, have a right to crucial information they need to avoid climate related financial risk at a time when climate driven weather and heat devastate communities and threaten financial stability. The SEC’s effort to give investors access to this information saw historic levels of engagement by the public during the rulemaking process.
“The only thing that is crystal clear today is the Commission does not intend to undertake the steps it is obligated to under the law to rescind the rule, nor does it intend to enforce that rule. Instead they are banking on a legal process they have walked away from, making a mess of the situation and leaving the courts to pick up after them. It’s an unacceptable posture both in its sleight of hand and its denial of the clear duty this Commission has.”
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